What is an SKU (Stock Keeping Unit)?
The smallest unit of inventory management. Different sizes or colors of the same product are usually separate SKUs.
In detail
SKU stands for Stock Keeping Unit. Anything that needs to be managed separately in inventory and sales should be set up as a different SKU. For example, the same T-shirt in 3 colors and 4 sizes makes 12 SKUs. Each SKU has a unique code, and stock, price and sales volume are all tracked by it.
For example
The same mineral water sold by the bottle and sold in 24-bottle cases counts as two different SKUs.
How companies use it
Set up a unified coding rule so that purchasing, the warehouse and sales are all talking about the same item. Analyze the sales of each SKU regularly and phase out items that have not sold for a long time.
Common misconceptions
Believing that more SKUs is always better. Too many SKUs tie up more inventory capital and are harder to manage. In many companies, most of the sales come from only a small share of SKUs.
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