What is SKU definition?

dliv logistique facile - favicon

Sommaire

What is SKU ?

SKU what is it? Firt of all, it means “Stock Keeping Unit”.

The SKU is a scannable bar code most commonly printed on product labels in a retail store.

The SKU consists of an alphanumeric combination of approximately 8-10 characters that allows companies to automatically track the movement of inventory.

We will learn all about the SKU in this article.

What is SKU ?

The SKU is defined as a unique identifier associated with a product.

Companies create their own SKU codes based on various characteristics of their merchandise.

Typically, they categorize the created SKUs into classifications.
For example, a DIY store defines different categories, such as hardware, electrical products, or garden products.

The SKU characters is a code that encompasses the price, product details and manufacturer, logistics company or trader.

The SKU can also be applied to intangible but billable products, such as repair time units at an auto garage.

In short, retailers use the SKU to identify and track their inventories or stocks.

A SKU is a unique code made up of letters and numbers that identify the characteristics of each product, such as manufacturer, brand, style, color and size.

Businesses issue their own unique SKU codes specific to the goods and services they sell.

Therefore, two different companies that sell a product with the same characteristics, probably issue two different internal SKUs.

Finally, the goal of the SKU is to help companies more accurately and quickly count each product in their inventory.

What is SKU on youtube

SKU structure ?

Businesses have their own systems for creating unique SKUs.

There is therefore no predefined method for creating a SKU.

On the other hand, the SKU code generation system developed by a company must be methodical in its approach.

Each part of the SKU is divided into separate sections.

Each SKU section must always have the same number of characters in all SKUs.

This means that if the product group is 6 characters long, it should be 6 characters long for all SKU cases generated.

In addition, the company must think ahead of its future use cases in order to determine as accurately as possible a sustainable SKU generation system.

Each company must define its own SKU structure.

We will therefore detail an example of a structure below:

Example of a product SKU structure
SKU structure example
  • Product Group: This example has a 6 character section to identify the product group. In this case, the product is of the “electrical product” type according to the defined code “PROELE”;
  • Product reference: the product reference can be incremental;
  • Product Type: This section is useful if there are different types of items, such as. In this example, there is only one character allocated. The “A” stands for “House”;
  • Other features: other sections can be defined according to the needs of the company.

What does SKU used for ?

First, the SKU isn’t just about identifying a product and tracking inventory.

In contrast, the SKU allows the company that uses it to collect valuable data on its products. This data can be used, for example, to assess the profitability or efficiency of its activities.

Self storage and warehouse activities analysis

SKU allow retailers to collect data that enables them to perform several types of analysis.

This could include, for example, determining which products to sell the most, or displaying seasonal and cyclical sales forecasts in their different customer segments.

This analysis provides several advantages, including the optimization of inventory management.

Inventory management

Inventory management is by far the main function of a SKU system.

With the SKU, businesses are able to track inventory levels, revenue and logistics flows.

They can then define optimal inventory levels and better manage their activities using data collected from sales.

Customer relationship

The SKU of a given product can provide different information about its availability in stock, and in which logistics warehouse, for example.

A retailer can better respond to customer demands, thanks to the instant information provided by the SKU scan. He can then offer the exact quantities in stock for the customer or offer alternative products.

Finally, the SKU helps improve business efficiency and customer satisfaction.

Marketing, advertising and communication

The use of SKUs in marketing is a topical technique.

With the competitive landscape of online sales, a SKU helps identify marketing techniques that generate sales.

Many retailers market their products by their SKUs instead of the manufacturer’s model number.

Which makes it more difficult for:

  • a consumer to compare models from one brand to another;
  • and for a competitor to apply a low price strategy on the same product.

Finally, the SKU can also help reduce the practice of consumers visiting stores to compare prices for items they intend to buy online.

Alternative product alternatives

The best example to illustrate this point is Amazon’s practice in this area.

For example, with the information in the SKU, Amazon is able to select items to display as “suggestions” when a consumer searches for a particular product.

The structure of the SKU then makes it possible to mesh all the products according to the criteria and characteristics that constitute the SKU.

Whats is the difference between SKU and UPC ?

UPC stands for “Universal Product Codes” in English, and in French for “Universal Product Codes”.

Since companies create SKUs in-house to track inventory, then they vary from company to company for identical products.

In contrast, UPCs are the same regardless of the company that sells the products.

UPC barcodes were introduced in 1974 to help retailers track their products.

UPCs are 12-digit numeric codes.

First, it’s GS1 US, the US branch of an international GS1 organization that administers and manages UPC codes.

The UPC code assigned to a product remains constant for it throughout its lifespan.

Therefore, a product retains the same UPC code even after it has been sold by multiple retailers.

However, for products marketed internationally, companies use a special 13-digit version of a UPC, called International Article Number (IAN) or European Article Number (EAN), depending on the country.

Whats is IAN, EAN, GTIN and ISBN ?

Whats is EAN and IAN ?

EAN stands for “International Article Number” and replaces the IAN which stands for “European Article Number”.

It is an extension of UPC codes, coded as barcodes on most products.

Sometimes the barcode is also referred to as GTIN (Global Trade Identifier).

The EAN includes the country of origin, the manufacturer and a product number.

In addition to that, it includes other check digits.

What is GTIN ?

The GTIN stands for Global Trade Item Number® (GTIN®) is the globally unique GS1 identification key used to identify trade items.

GTIN is one of the main building blocks of the GS1 system.

GTINs are assigned by the brand that owns the product.

They help identify products as they move through the global supply chain.

The GTIN is used wherever a product or service needs to be identified. This includes ecommerce, physical business transactions, computer systems, physical product, etc.

Finally, the GS1 standards define the structure of the GTIN.

The GTIN can be 8, 12, 13 or 14 digits long to suit different applications and products. These GTIN structures are respectively called GTIN-8, GTIN-12, GTIN-13 and GTIN-14.

Each GTIN is a numeric string made up of distinct characters:

  • GS1 Company Prefix: a globally unique number licensed to a company by a GS1 member;
  • Item Reference: A number assigned by the user to identify a commercial item.
  • Check Digit: The final digit calculated from previous GTIN digits. This figure is used for check that the data has been correctly composed.

GTIN example
GTIN example

What is ISBN ?

First, ISBN is an international standard number used for books.

The ISBN had 10 digits until the end of 2006. As of 2007, the ISBN now consists of 13 digits.

Each ISBN consists of 5 elements, each section being separated by spaces or dashes.

  • Prefix: always 3 digits long. It can only be 978 or 979, which corresponds to a “book” type product in the EAN system;
  • Record Group: This item can be 1 to 5 digits long. It identifies the country, geographic region or linguistic area;
    GS1 Company Prefix: Up to 7 digits long. It identifies the publisher;
  • Article number: It can be up to 6 digits long. It identifies the edition or the unique number of the work;
  • Check digit: it’s always the last digit that mathematically validates the rest of the number.

How to read an UPC, IAN or ISBN ?

GS1-Barecode-Checker-Website allows you to do a reverse lookup from a UPC, IAN or UPBC.

Share on facebook
Share on twitter
Share on linkedin
Share on email
Share on pinterest
Share on telegram

Other posts

c'est quoi le SKU
What is SKU definition?

SKU what is it? Firt of all, it means “Stock Keeping Unit”. The SKU is a scannable bar code most commonly printed on product labels in a retail store....

Read more

Other posts