Why should you keep a SKU database?

By Oleg Mikhailenko
Published in Solutions
June 24, 2022
2 min read
Why should you keep a SKU database?

Whether you’ve been in the e-commerce game for a decade plus or whether you’re just getting started on your retail journey, it’s non-negotiable that you have an accurate and efficient way of tracking your inventory. That’s where SKU tracking comes into play. But what are SKU IDs, and how do you use them? Why are they so important? This article explains everything you need to know about SKU numbers and how they’re applicable to your business.

How do you define SKU?

Put simply, stock keeping unit numbers, or an item SKU for short, are numbers that are used to search for, label and track inventory. These SKUs, when analyzed, usually take the form of strings of 8-12 alphanumeric characters and are often designated to products based on various characteristics such as manufacturer, color, style, type, or size. SKUs are created and used across the retail industry (not only in e-commerce) to manage inventory in warehouses and shops and ensure that an accurate count of stock levels is always maintained. These SKUs can then be represented in the SKU database on a product inventory sheet, to ensure that everything is properly organized and taken care of.

How do you create a SKU master?

First, you need to have stock keeping unit numbers to put in your master list. It’s absolutely possible to generate everything by hand. However, this can get complicated quickly, especially as you scale your business and add more and more products to your roster. It’s easy to accidentally make mistakes, or discover halfway through assigning your numbers that there’s a better and easier way to do it. You’re then left going back and changing everything that you did before, or alternatively gritting your teeth and going forward with a less efficient system.

First and foremost, any internal identification number should be easy to understand. This means that the most important identifiers should be placed first, so you can know what type of product you’re looking at immediately.

Next, you have to make sure that your numbers never begin with zero. This causes issues for processing and fulfillment software and can cause unnecessary delays in updating inventory levels, so it’s best to avoid it entirely.

Lastly, it’s helpful for legibility reasons to separate identifiers by using dashes or hyphens. Going back to the example of clothing retailers, if you’re selling a red collared shirt in the size XL, the SKU TOP-CS-RED-XL is far more readable than, for instance, TOPCSREDXL would be. Since the purpose of these identifiers are to be useful internally, being readable and identifiable at a glance is more important than it would be for a UPC, which can often simply be scanned and decoded digitally.

Of course, there’s a ton of software available that can do all this for you. When it comes to a SKU generator Shopify has a good one, but there’s a wide variety out there to choose from, and plenty of options for a good inventory management template.

In conclusion

There’s no one-size-fits-all approach for generating SKUs for businesses, so the more you tailor your labeling infrastructure to your own specific business needs, the more you can help your e-commerce endeavor succeed. By understanding your market niche, your vendors, and your customers, it’s a snap to craft SKU architecture that allows you to easily scale your business and smash sales goals quarter after quarter. We here at P2Pseller are always happy to help you along the way by providing revolutionary solutions on the free and open economy for e-commerce merchants of all sizes. Register a free account with us today to see exactly what we can do for you and your business.


Tags

#sku#database#logistics#inventorytracking#inventory
Previous Article
Calculating average inventory is deceptively simple

Oleg Mikhailenko

Co-Founder, CEO P2Pseller

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