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The Importance And The Techniques Of Creation Of SKUs

As you are into eCommerce you need to learn some of the important terminologies and its basic working procedure. Terminologies like FBA, drop shipping, PPC, POS and many more. The most important lingo you should focus on so that your process becomes smooth is SKU. It’s a three-letter acronym that sounds simple but has the capacity to transform your business reporting, efficiency, and profitability. So, let’s have brief know-how about the SKUs and its creation techniques:

What is the SKU?

SKU stands for stock keeping unit, is a unique code that comprises of letters and numbers in order to identify and track a product or a brand.  You can easily differentiate a product by keeping its name as per the brand, color, size, etc. The retailers use the SKU as a coding system in order to track the appropriate inventory and measure the sales.

Why are SKUs so important?

When it comes to selling products online, SKUs are considered important regardless of the size, the number of products you hold or the type of customers you handle. It is a very important aspect of an eCommerce business as it helps in:

Product Identification

No matter how many product variations you have, a strategically created SKU would help you to identify the products across all sales channels and systems. You can differentiate similar product types easily by the manufacturer name, price, color, size, etc.

Warehouse Management

Make your Warehouse management a streamlined and smooth task as with SKU you can easily distinguish individual products and their variations. The SKU helps to keep your warehouse organized and also helps your staff to quickly identify products for picking, packing, and stock keeping. These processes will take less time and helps to eliminate human errors. A streamlined warehouse makes it easy to pick the product and ship it within less time. The speedy internal processes help you to provide great customer satisfaction.

Inventory Management

SKU is an important aspect of a successful inventory management system. It allows you to track the stock with ease during the order process and notifies you during the time of reorders. The inventory management software and a proper created SKU will help you to automate the entire inventory process. You don’t have to manually walk down the warehouse aisle to check out the stock levels. The SKUs helps to maintain the proper inventory levels and profitable retail business.

Multi-channel Management

Now make the selling of the same product on multiple sales channels easier. You will get a consistent way to track and identify similar products with different title and description. Your multi-channel management software can leverage SKU to easily merge and update the stock quantities.


With SKUs, your multi-management software can now be able to generate better and more informative reports. Easily track slow-moving products, stock levels, shrinkage, sales and many more across your multiple sales channels. When accessed in your accounting system or point of sale, the series of numbers in the SKU would help you to track the unique information related to your product.

Some useful Tips on SKU creation:

Some major Platforms like Amazon automatically creates SKUs for your products. But, it’s better to create an SKU that you find relevant and meaningful, so that, it can be replicated across the multiple channels you are selling in. Here are a few tips on SKU creation:

You can also include the brand name, product number or warehouse location to the SKU as per your choice.

The KartzHub multichannel product management platform enables you to create easy SKUs. With these SKUs, you can streamline your inventory and manage your entire stock efficiently. KartzHub software utilization in your business would help you to save time, increase profits, enables better cash flow and provides improved business performance.

How are SKUs used?

When you browse a product in Amazon, you see similar product suggestions. Amazon’s internal algorithm picks similar items and displays as suggestions. The eCommerce giant assigns SKU to a product by identifying its similarity with other products. It also suggests the products depending on the uniqueness it is offering and the customer needs.  So, when you look for the blender on Amazon, you will see various other blenders of same functionality or wattage you want. But you won’t see just any blender, you will see only that blender that has the features you have mentioned on the search tab.

Most of the POS systems enable you to create SKU hierarchy. Before even you create a system for your inventory, you should clarify the way you want to track your inventory.

For example, A shoe can be given a unique code depending on the style (casual or formal), customer type (Men, Women or Children), material, color and size as specified above. If you are a big shoe retail store then you need to break down the categories even further like the season or the heel types. This in-depth breakdown of the product and then assigning the SKU might help you a lot. It would be very easy to track the product easily during the rush hours. The stock keeping unit contributes to better inventory management as well as enhances the customer shopping experience.

Another great benefit of the SKU is in advertising. E-commerce is a very competitive world and every retailer has a similar price range. With a unique SKU, you can protect your profit margins. For example, many sellers will create a similar SKU that would consist of first the manufacturer’s model number and then the other aspects. So, sometimes shoppers won’t be able to determine that if they are looking for a washing machine with an SKU number of a store they recently visited. This means you won’t have to match the same price range even though you have the same product. Here, you need to showcase the best and unique aspects of the product that is usually not explained by other store retailers.