What Does SKU Stand For?

SKU is an important part of product structure. By setting the SKU code, the merchant can identify the product inventory and know the location of the product. This article will introduce what SKU means, the importance of SKUs to merchants, how to create SKU codes, and how to use SKUs to better reduce our costs and improve our profits. SKU runs through our entire order fulfillment process, so having a clear SKU number allows us to make informed decisions to get higher profits.

What Is An SKU?

What Is An SKU

SKU refers to the product code and is an integral part of the product structure. If there is an SKU code, the merchant can use this code to sort the goods. Through code sorting, the merchant can conveniently find the storage location of the goods, to complete the order fulfillment in time. SKU codes include not only public attributes but also product-unique attributes.

Why SKUs Are Important To Store Owners?

Why SKUs Are Important To Store Owners

SKU can help us solve some practical problems, it can help track the location of goods in the entire inventory management, simplify the checkout process, and this process is all done through computer system settings, which reduces human errors in the process of operation. In addition, SKUs can provide accurate data to help us make purchasing decisions.

Help Us Manage And Track Inventory

Merchants need to know their product inventory at all times. Through SKU code management, merchants can determine how many items have been sold and how many items are in stock, so that merchants can make timely purchases. Through SKU code management, it is also possible to locate the storage location of the goods in real-time, which is beneficial to the merchants to clear the expiring goods in time.

Optimize Store Appearance And Improve Shopping Experience

SKU can give customers a good impression. Both consumers and our employees can easily find the products they want through the system’s complete SKU number setting. Whether by item type, collection or by the supplier, our products can be tracked and displayed at any time. SKU numbers can also enhance the shopping experience for consumers.

Good For Marketing Management

Learning to use SKU coding is also of great benefit to our marketing. For example, when consumers choose products, merchants can recommend products that may be of interest to consumers through SKUs, and then have a positive impact on consumer behavior. By tracking, you can locate the consumer portrait, which is convenient to improve the repurchase rate. This method also applies to the conversion of potential customers.

How To Generate SKU Numbers?

How To Generate SKU Numbers

Although SKU is very important, many merchants still do not know how to properly code the SKU of the product. Whether it is managed by software or recorded manually, the coding framework of SKU is the same. Merchants can use the following steps to code the SKU of their products:

Getting Started With Top-level Identifiers

Typically, the first two digits of the SKU number are the top-level identifier. The meaning of the top-level identifier is to distinguish different departments of the business, different store categories, or purchases from different suppliers. Therefore, as long as you see the first two digits of the SKU code, the merchant can know the location of the product, or which supplier the product comes from.

The Middle Number Is The Unique Identifier

After the first two digits are determined, the next numbering is necessary. The number in the middle can be used to identify the unique attributes of the product. For example, which number is used to identify different sizes of products; which number is used to identify different colors, which number is used to identify different categories, and so on. Therefore, as long as it is an attribute that is helpful to the merchant, we can determine it as an identifier and program it into the SKU code.

Serial Number Using For Complete SKU

The final encoding of the merchant can be done using some serial numbers, like some simple Arabic numerals. Through Arabic numeral coding, merchants can use it to distinguish new products from products that have been around for a long time. So in some cases, it is very convenient to associate the SKU number with the product serial number.

Combined Management Of SKU And Inventory Management System

Whether we use our own spreadsheet Excel to manage or use a special SKU management system, we can try to add SKUs to the previous inventory management system, so that as long as we update one of the data, we can The other data is updated synchronously, which can simplify our operation process and is very convenient for inventory management.

How To Use SKUs?

Targeted Product Promotion

SKU code is very important for merchants and is unique, so it can help us solve many practical problems. So if we have identified a suitable SKU coding system, we can apply it to work to solve detailed problems. Such as sales, product promotion, product growth planning, etc.

Targeted Product Promotion

Through the analysis of SKU, merchants can make a promotion strategy or promotion strategy for the product in a targeted manner. For example, after analyzing the source of profit through data, we can create some popular activities or customized pages for product promotion. In addition, special positions can also be added to pages with high traffic before, so that consumers can easily find the products we want to promote.

Improved Inventory Forecasting

Through the data provided by the SKU, the merchant can make a clear sales estimate; through the correct sales estimate, the merchant can reduce the inventory cost. In addition, excellent SKU coding allows consumers to find the products they want quickly and promptly, which greatly reduces the churn rate of customers.

Expeditious Order Picking

To meet the needs of different consumers easily, merchants often need to expand warehouse space and increase the inventory, which also leads to a problem: it is difficult for merchants to find the products they want among the numerous inventory items. For new employees, this is even more difficult to achieve. Therefore, by using the SKU number, it is convenient for employees to find products in time and reduce errors caused by manual labor.

Learn More

SKU codes can help us solve many problems and help us organize, track and find inventory using completed system processes. SKU code can not only use Arabic numerals to identify, but also add some letters for clear distinction, so it is very flexible for merchants. With a good SKU number, we can better promote products and provide customers with better services. If you encounter problems in the process of coding with SKU, you can contact the professional team of Honest FulPhilment to help you solve them.

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