What are SKUs?
Stock Keeping Units or SKUS are the internal record number of the products for companies. Unlike barcodes (EANS or European Articles Numbers or UPC or Universal Product Code), SKUS are your own product identification number and are not centrally organised.
Best practices for SKUs
💡 Set out a format for your SKUs and stick to it, so all SKUs are in the same format. Bear in mind our product range will increase over time.
💡 Try and identify your business in the SKU, it helps make it unique. Sam’s Widgets Ltd may start their SKUs with SAM-XXXXX.
💡 Create your SKU and don’t use those of a supplier
💡 Avoid using non-standard characters, stick to letters and numbers. Using nonstandard characters such as / @ or # can cause problems if your data is transmitted electronically as these characters have uses in computer code. In addition, they are often not allowed by marketplaces such as Fruugo, Ebay or Amazon.
💡 Don’t start your SKUs with a zero, on spreadsheets and other electronic records the leading zeros are often removed and this can make your life difficult.
💡 Avoid using certain letters which can be misread, such as O and 0 or I and 1. Wrong inputs can make reconciliation difficult and cause no end of problems getting your stock records to match.
💡 Don’t make SKUs too long, use the minimum needed for your business, keeping in mind your business may grow.
💡 Don’t mix cases, keep them in either all capitals or all lowercase.
What are the limitations of SKUs?
The main weakness of SKUs is that they are not necessarily unique. So, there is nothing stopping companies from also picking the same SKU.
A consumer searching for your SKU might find someone else’s products, not yours.
This is why if you wish to sell your products on marketplaces such as Frrugo or Amazon, they specify an EAN (European Article Number) or UPC (Universal Product Code) in addition to a SKU.
What’s the difference between a UPC and an EAN?
UPCs (Universal Product Codes) are used mostly in North America and are a 12-digit system.
EANs are the predominant system in the UK, Europe and the rest of the world. The most commonly used is EAN-13, based on a 13-digit number. The first three digits are used to denote the local GS1 agency that issued the EAN. In the UK these are 500–509.
In the UK
EANS are issued by GS1 and in the UK this is the responsibility of GS1-UK.
Outside the UK
European countries have their own local GS1 agencies which can be found by looking online.
UPC can be accessed by joining the US GS1 agency.
Key takeaways
Implementing best practice SKUs is essential for enhancing inventory management, improving operational efficiency, and optimising data analysis in any business. By making sure that you standardise SKU creation with a logical, consistent coding system, your company can minimise errors, streamline its processes, and better analyse your sales and stock levels — resulting in cost reduction and efficiency gains.
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