There’s a reason why the job outlook for logisticians is expected to rise by 30% over the next decade. These professionals are in charge of coordinating and organizing the supply chain. And, as you probably know from recent headlines, the supply chain is in vast need of improvement.
One effective solution has been the usage of stock-keeping units. But, exactly what are these unique codes? And why are they important for businesses? If you want to know the answer to these questions, and more, then you’re in the right place.
In this article, we’ll teach you everything you need to know about stock-keeping units. Let’s get started!
What Are Stock Keeping Units?
A stock keeping unit, or SKU as it’s commonly referred to, is a number that’s been assigned to a product. The point of this number is to help track the product as it makes its way through the supply chain. It’s also important for inventory management purposes.
Typically, this number is eight characters long, combining both numbers and letters. It typically contains a short description of the item it’s being used to describe.
Each different store will have a different system for classifying products according to their SKU code. However, typically, they use attributes like:
- The gender of the product
- The specific brand of the product
- The category that the product falls into
- The size of the product
- The specific type of product
- The color of the product
- The name of the product
- The price of the product
- The department code
For example, let’s say a business is creating a code for a t-shirt. It’s small, made of cotton, and is the color red. It might be assigned a code like T1S40CNRD.
So, in simple terms, stock keeping units are a unique form of identification that can be used to find the product. However, it’s important to know that stock keeping units are not bar codes.
Still confused about stock keeping units? That’s all right. It can be a confusing concept. Make sure to check out this article to learn more about SKU e commerce.
What Types of Businesses Can Benefit From Stock Keeping Units?
These days, the people who stand to benefit the most from stock keeping units are eCommerce sites. These specialized businesses rely on the supply chain to reach their customers.
As such, the easier they can track their products, the better their business will be. However, it’s important to note that they’re far from the only business that can benefit from SKUs. Here are some of the other types of businesses that should consider using them:
- Retail shops
- Catalogs
- Warehouses
- Product fulfillment centers
- Service providers
- Grocery stores
- Auto body repair shops
What Are the Benefits That Come With Them?
As you can probably tell, implementing a SKU system into your business can be a big undertaking.
So, what are the benefits that come with doing so? To give you a better idea, in this section we’ll go over some of the main advantages that come with keeping your stock keeping units up-to-date
Helps Keep Accurate Inventory Control
Inventory management is a difficult balance. If you have too many items in stock, then you will need to offer price cuts to sell them. But, if you don’t have enough items in stock, then you’re losing potential business.
Stock keeping units are the solution. When a customer purchases a product from your store, then the SKU is scanned. From there, the POS system automatically records the data and removes one of the products from the inventory.
So, with stock keeping units you get the benefit of an inventory that’s constantly kept up-to-date. That means no more overstocking or understocking.
Helps Forecast Sales
Stock keeping units do a great job of telling you what items are selling well and what items aren’t. This, in turn, helps you forecast potential sales.
For example, if you notice that one item is selling quickly, then you might want to stock up on it if the holiday season is approaching. Being able to anticipate stock requirements goes a long way toward fostering sales that you wouldn’t make otherwise.
Quicker Shipments
If you rely on warehouses to ship your product, then there can often be a disconnect between the store location and the warehouse. A SKU number can help bridge this gap. A quick scan is all it takes to find the exact location of the product.
That means that warehouses can ship them a lot more quickly when you’re low on stock.
Better Customer Support
There’s nothing worse than going to buy a product only to discover that it’s out of stock. When this happens it hurts customers’ perception of your business.
Luckily, a stock keeping unit is great for informing customers when a product will be back in stock. This, in turn, improves their experience,
How Do You Get SKU Numbers for Your Business?
Creating an SKU number is a fairly straightforward process. As we mentioned before, it involves assigning the product unique characteristics, like size, color, and brand.
From there, you create an alpha-numeric code that easily corresponds to each characteristic. However, that’s the easy part. Linking all of your codes together in a comprehensive system can be difficult, especially if you don’t have a great grasp of inventory management.
The good news is that there are a lot of companies out there that can help you. So, don’t feel embarrassed if you need to hire one to help you get started with your organizing system.
Want More Content? Keep Reading
We hope this article helped you learn more about stock keeping units. As you can see, there are numerous benefits to implementing these into your business.
Not only does it help streamline your operations, but it also benefits your customers. That means repeat business and more profit. So, find a provider to help you today.
Did you enjoy this article? If the answer is yes, then you’re in the right place. Keep exploring to find more topics that you’re sure to love.
