Everything you need to know about Stock keeping units (SKUs)

If you have already spoken to one of our experts, you have likely already been asked “how many SKUs do you have?” but what is a SKU number, how do you use them effectively and why do we need them?

The term “SKU” can be found right across the eCommerce ecosystem, from the back end of your website and marketplace listings, through to supplier catalogues and even your warehouse. They are an important concept to maintain consistency across different systems and overcome some of the complexity of selling online.

We have compiled everything you need to know about SKUs in order to use them to their full potential and future proof your business answering questions like:

⇒ What is it a SKU?
⇒ What are SKU codes used for?
⇒ Who creates a SKU?
⇒ What’s the difference between a barcode and a SKU?
⇒ EAN, GTIN, UPC, SKU: what’s the difference?
⇒ Why is my 3PL asking me about SKUs?

What is an SKU?

Every different item you sell needs to be easily identifiable to limit errors and maintain accuracy throughout your sales processes and systems. To do this, merchants and manufacturers use “SKUs”, which stands for Stock Keeping Unit.

This is a numerical or character code assigned to each unique product to ensure that you are always able to identify which product you are speaking about, regardless of how it is described, where its sold, or how much it is listed for.

It is therefore a unique code for each size, colour and type of product you sell, and can also be used for non-physical items such as warranties, or components of an item.

Example: If you have a small business selling 3 styles of short sleeved men’s t-shirts for example you may be able to easily differentiate by colour. With this reasoning, you may think you have 3 SKUs – RED, BLUE, WHITE- but what about different sizes? What happens when you introduce a red long-sleeved t-shirt to your range? In fact, in this scenario, you would initially have potentially 12 SKUs.


In order to future proof these codes and account for any unseen opportunities for confusion, these SKUs can also be numerical or alphanumerical. The benefits of this type of SKU code are discussed later on.

What are SKUs used for?

As a main method of differentiating between products, SKUs have a range of benefits across your business and can be used in retail stores, online stores, marketplaces, catalogues, warehouses and 3PL centres.

Inventory accuracy

As you can imagine from the title “ stock keeping unit”, the primary purpose of an SKU code is to assist in the inventory management processes. SKUs are important to ensure you can track exactly how much stock you have of each variation, and to automatically update this across your different sales channels.

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Stock Purchasing

SKUs can also be used to simplify placing orders with suppliers, ensuring the correct items are requested. Especially if you use the SKU determined by the supplier.


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SKUs are an essential element for matching products when you are integrating multiple tools, ensuring the data is correctly updating from each source. For example, syncing inventory levels across multiple sales channels, or automatically populating listings with product information.

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Fulfilment & Bundling

SKUs are also used to match products in a warehouse with the items ordered to make sure less errors occur, such as picking the wrong size or colour way. SKUs can also be used to communicate what is included in bundles and giftsets to warehouse teams to allow for items to be sold on their own as well as in other formats.

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Unboxing is the first physical interaction that your customers have with your product. So it’s vital that customers experience products and packaging as per your instructions and, crucially, without any damage or breakages. Sustainable packaging using protective insulation materials – such as Flexi-Hex – as well as appropriate sized boxes are all helpful when it comes to achieving this. Some fulfilment providers can even meet more targeted packaging requests so that your products arrive complete with a sample, branded note, or other marketing collateral of your choosing.

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  • SKUs can be visually represented as barcodes so they can be used with scanners for convenience and accuracy however this is optional. SKUs can be as simple as 5 letters or numbers, while product barcodes are usually used to represent EAN codes.

  • It can look like a shorted product description (BB-SHIRT-RED-XL) a number string (900456901) or a combination of the two (2024VAN-01)

  • Using the SKU anywhere you need to identify a product will ensure consistent, accurate identification for reporting purposes. Labelling shelf location in warehouses, on cartons, within product listings and on inventory management tools are all good practises.

  • Character codes are often longer than numerical codes but are more meaningful and memorable. Numerical codes however can also follow a particular format. What you chose to use for a SKU is up to you but do read through our best practices above for more tips.

  • Check case sensitivity! If that doesn’t work, speak to one of our helpful support team.

  • With such a big marketplace, Amazon has to operate very strict and thorough inventory Management. In many cases, the same product on Amazon will have many sellers, therefore, in order for them to identify which merchant sold the product, they need to have a unique SKU for each sellers items.

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