A SKU, short for Stock Keeping Unit, is a set of alpha-numeric characters that's easily identified when used in an inventory or point-of-sale system. SKU numbers, also known as product codes, alleviate the need to use the entire name of the item, making it easier to enter a product number during searches or when adding inventory to your system. The number you create for your SKU is entirely up to you, although you'll have more success if you follow a few guidelines. The key is to decide on a naming strategy you use from now and into the future as you add more products to your lineup.
Know the Limitations
Some marketplaces place limitations on the number of characters allowed in a SKU. For instance, Amazon limits SKUs to 40 characters. If you use inventory or point-of-sale systems, check with the developers to determine if there is a limit to the SKU. Sometimes, there's no limit, but a lengthy SKU may cause problems when exported or imported into different systems, and you may lose vital information.
A simple SKU number can be as short as four to eight alpha-numeric characters, suggests ClearlyInventory, developers of online inventory systems. Begin your SKU code with letters that relate directly to the product, such as using "BNB" for "banana nut bread." A SKU that starts with letters is easier for people to recognize the group of characters as a SKU and not a quantity or part number. Avoid starting the SKU with characters such as "/" or "*" since these symbols may be mistakenly read as formulas in programs such as Excel.
To avoid confusion, don't include numbers in your SKUs that look similar to letters, such as 0 and 1 (looks like "l").
Handling Variations of Products
Every product you sell, including variations of the same product, needs its own SKU number. For instance, if you sell a basic red T-shirt available in 3 sizes, the resulting SKUs might look like this, with "BTS" indicating a "basic T-shirt":
Making Advanced SKUs
Longer SKUs may be advantageous if you have lots of products or if you use just a few SKUs but want them to provide more information. For instance, SellerEngine, makers of pricing and inventory management software for Amazon sellers, suggests using UPC codes and warehouse locations in your SKU. If you're setting up SKUs to sell products on Amazon, it recommends adding a listing date, the condition of the item and the price you paid so you get all the information you need when reviewing the product code. For instance, if you create a SKU for a black leather briefcase that's sitting in a warehouse in Chicago and the listing is set to appear on May 1, it might look like this:
Do not include manufacturer or part numbers in your SKU, as these can change, and then your SKU number no longer makes sense, recommends TradeGecko, developers of a cloud-based inventory management system.