Description: The Stock Keeping Unit (SKU) is a unique identifier assigned to each distinct product or service that can be purchased. This code, which can be alphanumeric, allows companies to manage their inventory efficiently, facilitating the identification, tracking, and control of products in the warehouse and during the sales process. Each SKU is unique to a specific item, meaning that two different products will not share the same code, even if they are similar. This is crucial in e-commerce and retail, where the variety of products can be extensive, and accuracy in inventory management is essential to avoid order errors and enhance customer experience. Additionally, SKUs can include information about product characteristics, such as size, color, or model, which helps retailers organize their inventory more effectively. In a competitive e-commerce environment, the proper use of SKUs can make a difference in operational efficiency and customer satisfaction.
History: The concept of SKU began to take shape in the 1960s with the rise of automation in retail. As companies started using point-of-sale (POS) systems and barcode scanning technology, the need for a unique identification system for each product became evident. In 1974, the barcode was introduced as a standard in the industry, further facilitating the implementation of SKUs in inventory tracking. Since then, the use of SKUs has expanded across various industries, becoming a standard practice in e-commerce and retail.
Uses: SKUs are primarily used for inventory management, allowing companies to track product availability, place orders, and manage restocking. They are also essential for sales analysis, as they enable businesses to identify which products sell best and which do not. Additionally, SKUs facilitate logistics and order fulfillment, as each item can be quickly located in the warehouse. In e-commerce, SKUs are crucial for integration with inventory management platforms and shipping systems.
Examples: A practical example of a SKU would be an online retailer selling t-shirts. Each t-shirt may have a unique SKU that includes information about its size, color, and style, such as ‘TSHIRT-RED-M-L’. This allows the retailer to easily track the inventory of that specific t-shirt and manage orders efficiently. Another example would be an electronics store using SKUs to identify different models of mobile phones, where each model and color variant has its own SKU.
