Introduction
If you’ve ever worked in retail, you are aware of how challenging it can be to maintain inventory control. Poor inventory control has several severe effects and may even force the closure of your retail store. However, many simple best practices that may be used to help prevent this. One of the easiest ways to begin is by allocating a special SKU number to each item you sell.
Article Content-
- SKU numbers
- How do SKU numbers function?
- What does an SKU number represent?
- Why SKU numbers are useful
- The following are a few business functions for which SKUs are beneficial and even crucial
- How to generate SKU numbers
- Some tips for generating SKU numbers
- Conclusion
SKU numbers
A stock keeping unit (SKU) number is a unique code used in retail to differentiate between products and keep track of inventories. SKUs can have numeric or alphanumeric numbers.
Every successful retail operation has a solid SKU structure. It aids organizations in maintaining business and tracking sales. This article will define SKU numbers in detail, discuss their usefulness, and give advice on how to generate your own SKU numbers.
How do SKU numbers function?
SKUs include details on a product’s qualities, including color, design, brand, category, quantity, pricing, and more. SKUs, as compared to universal product codes, are unique to each company and can be customized to represent the strongest framework of your products.
Retailers can implement SKUs to track sales and get information about which products are most popular, enabling them to refill from suppliers and inform customers. SKUs provide a transparent and consistent internal organization structure that enables retailers to track their inventory down to the individual item, allowing business owners to know exactly what they have in store.
What does an SKU number represent?
Any data that a retailer chooses to include in an SKU number is allowed. For example, black men’s jockey vest in a large size may have the SKU: JOC-M-BLK-LRG-15, which would contain
the item’s key characteristics (jockey, men’s, black, large) and end with its serial number (which one it is within the same type, e.g., the 15th vest in stock).
Each SKU needs to be distinct. This helps to prevent confusion about amounts and allows you to keep track of each item in your inventory separately. So that you don’t mix up the two codes when running inventory, your SKUs should be visibly different from the manufacturers.
Why SKU numbers are useful
SKU numbers are crucial for efficient inventory control. Retailers may monitor how much of a given product is still available as well as which products are the most popular and require reordering by using SKUs. This aids retailers in identifying the products that sell out the quickest so they may avoid going out of stock.
The benefit of having an SKU numbering system also contributes greatly to the customer because it saves your staff time. Employees can quickly and electronically determine how much of a certain item is still available if your inventory is arranged by SKUs. This means spending more time on the ground interacting with consumers rather than excavating through stacks of inventory in the back room.
SKU numbers can be customized to fit the products you offer because they are unique to your company. Typically, a retailer will alter the code to match specific product features such as the brand, size, and colors.
The following are a few business functions for which SKUs are beneficial and even crucial
Inventory management
- It’s necessary to be aware of your stock of goods if you want to operate your firm effectively.
- SKUs are essential for small enterprises. SKUs make it much easier to assess what you have in stock, and therefore to recognize when things need to be reordered and minimize stock-outs, particularly at these times of production chain interruptions.
- Entrepreneurs have thoughts about which would be better: too much inventory to guarantee availability or stock-outs to generate high demand. But it’s ideal to strive to get as close to it as you can to the required amount of the product.
- SKUs provide a consistent method to categorize and locate orders from both customers and retailers, giving you more control over your inventory. Utilizing them guarantees that inventory never remains idle in a warehouse and that customers won’t have to wait months for the restocking of their favorite items.
Enhanced customer satisfaction
SKUs can be used in brick-and-mortar retailers to reorganize displays to highlight top-selling products, combine comparable items, and highlight excess inventory to make room for new products. Programs that use SKUs to suggest similar products and automatically designate products as “few last” or “sold out” can be useful for online businesses.
Forecasting sales
Point-of-sale systems can be used by businesses to gather information on sales through product SKUs and maximize revenues. When each product has a unique label, you can generate data and forecast the future growth, allowing you to schedule replenishment and investment in advance. With SKUs, you can quickly get rid of less popular items and consistently maintain in-stock desirables.
How to generate SKU numbers
You can generate SKU numbers and manage them manually, or you can think about spending money on inventory management software that automates everything for you. If you own a retail company, you probably have access to software that can do this.
The use of an online SKU generator is an additional choice. Many of these programs are free to use and may quickly create SKUs depending on the parameters you specify.
Some tips for generating SKU numbers
There is no specific rule or framework to adhere to because an SKU is unique to your business. There are a few excellent practices to remember, though:
- Follow a standard naming convention.
- Avoid starting your sentence with “zero.”
- Avoid using letters like O and I that can be mistaken for numbers.
- Only mention the essential qualities.
- Prioritize the most crucial identifiers.
- To make the SKU easier to read, use dashes to separate the identifiers.
There is plenty of space for flexibility, as you can see. Take a close look at your inventory and develop an SKU naming standard that is simple for you and your staff to understand. What works for the retail store next door might not work for you.
Conclusion
An SKU number is much more than just a random series of numbers, despite its appearance. You may maintain better control over your inventory and guarantee that you never run out of stock of your customers’ favorite items by tagging them with SKUs.
You also consider SWIL’s RetailGraph software, which has reporting features. It offers various inventory reports in a short amount of time; inventory control systems must be used.
Moreover, SWIL Software doesn’t impact accuracy. But the possibility of human error will be reduced by the automated form of SWIL Software.
To know more about SWIL’s inventory management software and get a free demo click this link.
