Why Every Ecommerce Seller Needs to Use SKUs?
A SKU, short for stock keeping unit, is a unique code used by ecommerce sellers to track and identify products in their inventory. Typically consisting of 8 to 10 characters, including letters and numbers, SKUs simplify the process of managing stock throughout the sales process.
What is a stock-keeping unit (SKU)?
To maintain an accurate inventory, each item you sell should have its own SKU. These codes can be customized to include specific product traits like size, color, price, brand, and more, allowing for better organization and tracking.
How SKUs work in ecommerce?
While SKUs may not always appear on your product listings, they are essential behind the scenes. They play a critical role in inventory control—each time an item is sold, its SKU is recorded to update your stock levels. Using SKUs enables sellers to monitor inventory more accurately, determine when to restock, and identify top-selling items.
For Amazon sellers, SKUs help connect your listed products with your inventory records, giving customers real-time availability information. If you resell various items, SKUs become especially valuable for managing a wide range of products effectively.
Third-party logistics and fulfillment partners also benefit from SKUs. These identifiers help them understand how much stock you have, how much space is required, and what resources are needed to support order fulfillment.
Benefits of using SKUs
SKUs offer several advantages for ecommerce sellers:
- Better inventory management: With SKUs, you can easily see your inventory status, identify when items need restocking, and follow products through every stage. This reduces errors and prevents situations like selling out of stock unexpectedly.
- Improved customer experience: Accurate inventory tracking allows you to provide updated product availability to your customers, helping them make timely purchases. It also helps you stay ahead of reorders to keep customer favorites in stock.
- Strategic planning: SKU data helps forecast demand for peak seasons, flash sales, and product launches. For example, if a product is being phased out, SKU tracking can help plan a final sale. Similarly, it helps you gauge how much inventory to reorder for seasonal items.
- Streamlined shipping: Beyond just sales, SKUs help manage fulfillment by showing what’s ready for dispatch, what’s already shipped, and any shipment delays—allowing you to respond quickly.
- Support for third-party providers: Sharing SKU and inventory data with partners ensures everyone is on the same page, enabling better coordination and customer service.
If your inventory is small, you might not need SKUs right away. However, as your business grows, assigning SKUs becomes crucial for effective inventory control.
SKU vs. product ID or GTIN
SKUs aren’t the only identifiers used for products—there are also product IDs and GTINs (Global Trade Item Numbers). GTINs typically appear near product barcodes and are used to identify items across different businesses.
Common GTIN formats include:
- UPC (Universal Product Code): A standard product identifier.
- ISBN (International Standard Book Number): Used for books and tied to their publication.
- EAN (European Article Number): Product identifier used in Europe.
- JAN (Japanese Article Number): Product identifier used in Japan.
SKUs are often confused with these codes, but their functions differ. SKUs are used for internal inventory management and vary between sellers. GTINs like UPCs, on the other hand, remain the same regardless of the seller. For instance, two sellers might have different SKUs for the same item, but its UPC will be identical.
When creating listings on Amazon, GTINs are often required. They help sellers match their products to existing catalog listings or create new ones when necessary.
How SKUs work when selling on Amazon
SKUs aren’t just for managing your inventory—they also help Amazon organize products in its catalog. When you add or upload a SKU, Amazon uses it to build a record for your item, linking it to the product detail page.
To keep your inventory accurate on Amazon:
- Assign a unique SKU to every product.
- Avoid changing SKUs unless you remove the product entirely.
- If you sell direct-to-consumer, you might not use SKUs until your product range expands.
You can still sell on Amazon without manually creating SKUs. By adding items through their GTINs or ASINs, Amazon can generate SKUs for you automatically. Alternatively, you can create your own during the listing process.
SKU vs. Amazon Standard Identification Number (ASIN)
When selling on Amazon, it’s also important to understand ASINs—Amazon Standard Identification Numbers. These are 10-character alphanumeric codes assigned by Amazon to identify unique product listings in its catalog. They help keep product pages organized and searchable.
Most Amazon products will have a combination of ASIN, GTIN, and SKU. Among these, only the SKU is used for your internal inventory management.
How to create and manage SKUs for Amazon sales
To assign a SKU when adding a product:
- Log in to your Amazon Seller account.
- Navigate to “Catalog” and select “Add Products.”
- Search for your item using its GTIN, ASIN, or name.
- If it exists in the catalog, choose it and enter your SKU along with the listing details.
- If it doesn’t exist, click “Create a new listing,” pick the correct category, and fill in all necessary fields, including your SKU.
To manage your SKUs:
- Log in to your Seller account.
- Go to “Inventory” and then “Manage All Inventory.”
- From this page, you can view and organize all your SKUs and related product information.
Ready to start assigning SKUs to your products?
Whether your inventory is small or extensive, SKU can help you organize and monitor your products efficiently. Start using SKU to improve your sales process—from listings to fulfillment—and deliver a better experience to your customers.
