Out of stock? SKU Management For Retailers – A Complete Guide
Before we get started on this guide to SKU management, it is necessary to understand what exactly is an SKU. The acronym stands for Stock Keeping Unit. It’s best defined as a series of unique numbers and alphabets that signify one particular product in the inventory.
SKU management is the process of creating, organizing, and perfecting an alphanumeric SKU system for the items in your inventory.
SKUs give minute details about the stock in your inventory. So even the color, size, price, and other attributes of a product can be accounted for.
As SKUs are location-specific, they can help you organize products in different warehouses as well. Some organizations prefer to use SKU management software to keep track of their inventory. For example, the Amazon, Target and Walmart SKU lookup from Intelligence node.
How Do SKUs Work?
Sometimes, SKUs are also called model numbers or product codes. But their function is essentially the same. SKUs are a shorthand version of a longer description. So the SKU for a size 32, round neck black shirt by the brand Puma would be something similar to PU-RN-BLK-32.
And if an employee at Target or Walmart wanted to use the Walmart SKU lookup or any other such software to look up this particular SKU, they would get details about the product in the inventory.
Plus, the internet-savvy millennials often use SKUs to check if a certain item they want is available at a particular store before going there in-person to buy it. Some stores, like Walmart, offer a Walmart SKU lookup that lets customers add the zip code with the SKU to check a product’s availability at that location.
Creating Your SKUs
There are no set guidelines for creating SKUs. Every company can have a different combination of codes to denote the products. All you need to remember is to stick to the guidelines you’ve set. It’s always advisable to use inventory management or POS software to create the SKUs, especially if you have a large inventory.
The first thing to do is to create a coding system which defines three things:
- How many characters (including numbers and alphabets) the SKU contains
- Which identifiers or attributes are chosen to represent the product
- What codes represent these attributes
For example, the identifiers for a product in a supermarket can be the brand name, category, size, color/flavor, location code. So the SKU code for a box of Honey Nut Cheerios in one Target in New Jersey could be CH-L-HN-NJ1.
There are certain pointers to remember while creating SKUs. Don’t forget to:
- Keep your SKUs short. About 4-9 characters are sufficient.
- Choose the right mix of letters and numerals for your SKUs
- Start the SKU with a letter. Using a symbol like ‘*’ or ‘+’ can make the software confuse it for a formula.
- Avoid special characters and keep the SKUs alphanumeric wherever possible.
It’s also best to avoid using the serial numbers given by the manufacturers of a product in the SKU as they’re often long and complicated. Another thing to remember is that you should never reuse a SKUs. Even if the product associated with that code is discontinued.
How To Use SKUs In Inventory Management
SKUs can be super helpful for several reasons. Here’s how you can use inventory management software to keep track of SKUs.
- The SKUs can be used to print a barcode to keep track of sales
- Creating a bulk map of certain SKUs and delivering it to your vendors ensures timely reordering of inventory
- SKUs can be bulk mapped for different, third-party marketplaces like Amazon, eBay, etc.
- With every sale (or system reset), you can see information about the inventory and prices updated on the software.
Having an efficient SKU management system is indispensable to an organization. It reduces shrinkage, saves carrying costs that come with keeping slow-moving products, and keeps you informed about the state of your inventory. After all, knowledge is power, and SKUs can help you make strategic business decisions.