When you start selling on e-commerce , you will often hear the term Stock Keeping Unit or SKU for short. SKU is a code on a product that is used to find out the stock of the item and manage inventory. Using SKU for each product will make it easier for you to manage products, especially when many orders are coming. You also need to know that SKUs are different from barcodes and universal product codes (UPC), SKUs are usually printed on product labels. SKU functions to track inventory automatically, record inventory stocks and vacancies, and see whether or not an item is in stock. You can print SKUs manually or use special sales management software. Creating an SKU is not a must, but it will really help your business going forward.


What is the SKU code?

The SKU code is an alphanumeric number that contains product details. Sellers typically use numbers 8 through 12 for inventory management and fulfillment. Depending on the type of inventory you have, you can add additional information to your SKU, such as color, size, gender, style, and more. For example, you can use the code BK for a t-shirt, CL for pants and add other information such as color and size.



Principles of creating SKUs

There are several things that can help you create an SKU

  • Use 8-12 words 
  • Create a structure that is easy to understand
  • Do not use zeros or characters such as #, & , @ and !
  • The first letter in the code must be the same as the brand or supplier
  • You can add other information such as date, price and shelf number


How to generate SKU codes

After you understand what an SKU is and the principle of its creation, now you can start creating an SKU. Most e-commerce sellers have their own format for creating SKU codes, but the implementation doesn’t have to be exactly the same. The structure of a SKU shows the product’s characteristics and some of the attributes that are useful to sellers and buyers. The easiest way to generate SKU codes is to use an inventory management system or a sales control software, but they are more suitable for large retailers who have to manage large inventories.

Check out the anatomy of the SKU below so you understand better!

Start with things that are easy to find

The first two or three letters should indicate something easy to identify, such as a location, store name, supplier or brand. This is to facilitate identification of locations, store names, suppliers, or brands by only looking at a small portion of the existing SKUs.


Include unique features in the middle

The middle section of an SKU displays the unique features of that product such as color, size, gender, or other category. That way, the product will be easier to recognize by looking at the middle of the existing SKU.

The code sample for the unique feature is as follows:


The letter code L – indicates goods for men

The letter code P – denotes goods for women



HTM letter code indicates black goods

The letter code MRH indicates colored goods signify Red

The HJU letter code indicates colored goods indicating Green

The letter code BRU indicates colored goods indicating Blue



Letter code SS – denotes an item for the Spring and Summer collection

Letter code AW – indicates an item for the Fall and Winter collection


Sizes (US)

Code number 4 – indicates US size 4

The code number 4% denotes US size 4.5

Code number 5 denotes US size 5


End with an identification sequence number

The last two or three letters on the SKU must represent a sequence of identification such as 001, 002, or 003. This is to indicate when the item was purchased or processed and can also tell whether the item is old or new.


Tips for creating an effective SKU


Keep the SKU code simple

You don’t have to code a very complicated SKU using hard-to-understand terms. Maybe you can read it, but not with your supplier or vendor of goods. Keep the code simple and easy to understand. It’s also not necessary to make the SKU serial number too big.


Avoid confusing letters

Do not use letters that confuse many people. As an alphanumeric code, some e-commerce and retail stores are experimenting with letter and number combinations. Avoid using letters that resemble numbers such as the letter “O” which is similar to the number zero (0), the letter “I” which is similar to the number one (1) and the letter “Z” which is similar to the number “2”.

Some letters commonly used are BLK (black/black) RD (red/red) GRN (green/green)



Don’t start with zero

Avoid making SKUs with zeros (0) in front. This is because the computer system reads a zero as “zero” and will enter the wrong SKU. For example, a product with SKU 03300065D will read as 3300065D. Typically, retail stores use the brand or supplier name as the SKU code prefix.


Start with the main features

E-commerce sellers use the main feature of an item at the prefix of the SKU code. This makes it easier for them to recognize the product in the package. After the main feature of the product is determined, they will make it an identification code. You can put your brand, supplier or location details as the main identification mark.

Do not enter the manufacturer number 

Generating SKU codes is actually quite easy. But not all sellers do this, and they end up including the manufacturer’s number as the SKU code instead.



Closing remarks

In closing this article, you can tell that there are small things that are of great value. Creating an SKU is actually quite simple, but these simple things can help you in matters of inventory management, packaging, tracking, and even up to the fulfillment stage. Substantially, well-organized and neat inventory can make your e-commerce business more streamlined and profitable.

To make your business more profitable, you can store your goods in a smart warehouse to make it more efficient and economical. The process of owning a smart warehouse is quite complicated, there are many things that must be considered and it also requires a lot of capital.

As a solution, you can use a logistics aggregator service like NimbusPost , which has many shipping and logistics partners ready to deliver your packages to more than 1 million shipping destinations.