The Importance of Product Sku For Order Management

Avoid Common Mistakes and Learn the Best Product Sku Management for Your Products.

A stock-keeping unit, or SKU, as it is more commonly known, is vital to managing inventory levels accurately and efficiently. SKU management is a unique identifier of an item in a particular inventory management system,  not a completely unique identifier like a UPC. A SKU can include details about the product and its variations and, unlike a barcode, can be read by humans. The largest benefit to having a SKU code system? Your business can track inventory levels more accurately. By keeping accurate count of your products using SKUs, you are optimizing inventory levels by having the right stock at the right time, increasing revenue, and improving your efficiency.

A product SKU must be unique to your company. The nice thing about using a SKU instead of a barcode is the consistency among vendor catalogs, e-Commerce platforms, fulfillment companies, and online marketplaces, ensuring that your inventory is managed successfully and accurately within Zenventory. Right off the bat, product and SKU must be differentiated. A SKU is assigned to a particular location. You can have as many products as you want but the SKU system needs to be consistent. It is important to distinguish your items, especially if you have a lot. SKUs can differentiate between item description, size, color, packaging, manufacturer, etc. Because many variants can occur in items, a single product can be associated with multiple SKUs, even in a single location. You can have as many SKUs as you have locations but typically there is one SKU per store or location, per warehouse. If the majority of your items are stored in a single location, some items can be sold at multiple locations, causing extra SKUs to be generated. Many warehouses make the mistake of having different SKUs for the exact same product. This can happen by having different SKU requirements for different online marketplaces or the simple fact that there are no best practices in place for SKU creation.

“Master SKU” and “Alias SKU”

A Zenventory expert can step in to help businesses remedy any product SKU inconsistencies across all warehouses. One thing we do is create a “Master SKU” category. This is one SKU per actual product that we use for tracking quantities internally. In an ideal world, this SKU would be used universally and we could stop there, but that’s not usually the case in multi-channel e-Commerce businesses. Our solution? Organize any duplicates as aliases. By creating an “Alias SKU” category, these can represent any alternate reference to an item that exists in the system as a Master SKU. All we have to do is tell the system which Master SKU to associate with each Alias SKU. For example, if you have a product SKU on eBay listed as ITEM-123 and the same product listed as ITEM-789 on Amazon, you can use an Alias SKU to link them and properly manage your inventory levels. (Note: ITEM-123 and ITEM-789 cannot be used as SKUs for any other product in your marketplaces.) This can be done outside of Zenventory using a spreadsheet and conducting an import, especially if there are a lot, or a one-by-one system within the Zenventory interface if there aren’t many.

By managing your product SKUs properly, you are able to keep the most accurate inventory levels, increase your revenue, and increase efficiency. Don’t fall victim to inventory holding costs inconsistent stock levels. A simple solution of matching your items to their proper SKUs is an essential practice and a must for any sized business. To start managing your inventory the right way, contact Zenventory to schedule a one-on-one consultation and get your free quote. Discover the zen of inventory management and be the master of your inventory dojo.