A Stock Keeping Unit (SKU) is a unique alphanumeric code assigned to each distinct product and service that a business sells. It is used internally for inventory management purposes to track stock levels, sales, and other metrics accurately. Every variation of a product—such as size, color, material, or style—receives its own unique SKU. For example, a t-shirt in size Medium, color Blue, would have a different SKU than the same t-shirt in size Large, color Red. SKUs are critical for: Inventory Management: Providing precise counts of what is in stock, on order, and sold. Sales Analysis: Tracking the performance of individual product variants. Warehouse Operations: Enabling efficient picking, packing, and stocking by uniquely identifying every item. Supply Chain: Streamlining ordering and logistics with suppliers. Unlike a UPC (Universal Product Code), which is a standardized barcode assigned by an external organization, a SKU is created and managed internally by the retailer or brand, allowing for a customized system that fits their specific needs.
