What is SKU? – Definition, Functions, Benefits, and More

Definition SKU (Stock-keeping unit)

SKU codes: what is it, and what is its benefit in the store’s ecosystem?
To achieve successful management in the store, you have to know how to keep reasonable control of our merchandise; such is the case of [SKU] codes.

How does it work?

In the retail business, it is essential to control each of the processes involved in the proper functioning of its operations. And this does not escape the inventory of merchandise, in which it is crucial to detail all the information about the products available in the store.

Coding systems are used by retailers to keep track of their inventory, using these codes can make a difference when stores need to know when to reorder products and get an indicator of which ones are moving faster.

By its acronym, [SKU] translates as an existence maintenance unit. Each [SKU] represents a product that is for sale and consists of an exclusive set of characters that relates to a particular product.

Each code has unique numbers and alphabets that refer to different characteristics of the product, and humans can read and understand the [SKU], unlike barcode. The most important advantage of an [SKU] is that it allows retailers to make more accurate stock readings, giving them the possibility of saving time and money, and above all, providing extremely efficient compliance.

It is also essential to know how [SKU] codes are applicable for use within retail. It is composed of alphanumeric characters that are generally a combination of about eight characters that gives the details of an item. Such as its size, color, brand, style, price, and manufacturer.

The [SKU] for long-sleeve shirts, black and size XS, can be read under the code CAM-MC-AZU-XS.

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Benefits of the SKU in retail

It helps to form a relationship between products and consumer preferences quickly. In an electronics store, it helps to select a product to give suggestions to buyers.

With the help of an SKU of an item, a retailer can track its inventory and sales through detailed reports in real-time.

Its other benefit is to let you know the availability of units of a product in the warehouse. The primary function of an SKU is inventory management. Still, it can also improve the customer’s shopping experience since it can electronically identify its stock levels. That reduces the customer’s waiting time and ensures the consistent dollarflow in the company’s account.

It is possible to streamline customer service through the use of an SKU ecosystem since the portable scanner is joint with this tool. This technology helps the store personnel to check the list and find the product quickly.

It helps in taking a strategic decision- about the selection of products to sell in the store. This is possible thanks to the tracking of the product variants since it allows measuring the individual characteristics of each product.

The possibility of choosing and packing an incorrect product as ordered by the customer reduces,
It is not only helpful in the case of large retail chains, but also for smaller retailers. Since the use of the SKU can help you build your inventory database, where the stock gets appropriately managed.


An inventory maintenance unit, or SKU, is a product identification code used in retail stores. That is a machine-readable code that helps track the item for record.

SKU helps to determine which items are in stock and which items require reordering, to increase profits.

When the SKU is applied correctly, efficient, fast, and error-free results get obtained, using an SKU system can save valuable time. And also, an instantaneous level of certainty is achievable.

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Kamran Sharief

I write about technology, marketing and digital tips. In the past I've worked with Field Engineer, Marcom Arabia and You can reach me at

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