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The importance of SKU for inventory

An increasingly common term among e-commerce entrepreneurs,Stock Keeping Unit (SKU) is traditionally used to identify items in stores or catalogs.

It is a product identification number, usually ten alphanumeric digits, that facilitates inventory management.

When accessed at the point of sale or in the company’s accounting system, SKU tracks product-related information.
Through it, you can search and identify exactly which product was sold, delivered or simply exchanged.

Unlike universal product codes (UPCs), SKUs are individual, that is, each retailer has its own set of SKUs for its goods.

How it works

In general, they are divided into classifications and categories. For example, all SKUs in a company start with the first two letters always the same – such as the brand initials, for example – then letters indicate the product type, color, while other numbers describe model, and so on.

Also called model numbers, part number or product code, SKU acts as the ID of merchandise and is intended to facilitate and expedite accurate inventory accounting.

After all, managing inventory is vital to maintaining the financial health of the company.

Sellers know very well that it is very easy to get confused in the middle of a lot of products. The SKUs have come to organize this puzzle.

For businesses involving inventory and storage of products, SKU makes all logistics more agile, helping in the assertiveness of processes and avoiding possible errors in inventory.

SKU for inventory management

Logistics understands that the effective and organized management of inventory and storage is fundamental to the success of the company.

The larger the volume and variety of products of an enterprise, the more challenging is the task of controlling the inputs and outputs of items.

We know that poor inventory control generates high costs. When done right, SKU management allows you to optimize inventory and purchases and thereby increase revenue. In addition to avoiding the unexpected lack of any item.

With SKU it is possible to leave the stock very well organized, which saves time and consequently avoids costs.

Benefits of SKU

  • are unique for each company;
  • when designed rationally, they are readable and easily understood by people;
  • is the most effective way to manage and maintain inventory;
  • these unique codes allow the company to establish inventories and ensure the purchase of the exact quantity of products to avoid the lack of any item;
  • the SKU stores the specifics of each product, and may contain the item description, color identification, manufacturer information and warranty terms;
  • makes it possible to know exactly the number of products in stock;
  • is an excellent way for transport companies to track products;
  • agility in maintenance, distribution, purchase, sale and exchange, that is, stock as a whole;
  • it can be used in the barcode;
  • integration with e-commerce and virtual stores is possible;
  • is accepted by POS systems, with inventory and sales tools;
  • enhances the company’s integrated communication

SKU in e-commerce

As in retail, in e-commerce, SKUs allow greater inventory control and facilitate integration with ERP-type management systems.

In e-commerce, the classification of items and products by SKUs prevents errors in inventory and order management, and prevents wrong products from being delivered , ensuring that the items sold are packed and sent to the right customers.

As SKU applies to the entire inventory management process, it ends up being a fundamental tool to keep logistics always in tune, without incurring delays or other problems.

SKU is critical to e-commerce on three bases:

  • stock: gives the exact quantity available, so that the maximum and minimum stock is controlled, optimizing the integration of the stock with the online store;
  • Storage logistics: makes it easier to find and package the right product;
  • Product specification: indicates the main characteristics of each item.

The adoption of organizational methods and inventory management with the use of SKUs codes is very relevant to have efficient and high quality logistics processes.
Interested in organizing your inventory using SKUs but don’t know where to start?

Sequoia, the largest logistics operator of e-commerce and technology in the country, with expertise in complete and integrated logistics solutions, offers the best solutions according to the needs of each company.

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