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How to Name Your SKUs For Your Inventory (+ Examples)

How to Name Your SKUs For Your Inventory

It’s critical to think about how you’ll name your items and keep track of inventory levels while also providing product information rapidly and accurately across departments.

Also, to more quickly deliver and package your orders.

You’ll be able to make it simple for team members and staff to comprehend and understand what each SKU stands for.

In this post, we’ll examine some of the most common strategies employed by businesses when coming up with SKU names.

Let’s start by defining what SKUs are and why they’re crucial for your company.

What Are SKUs and How Do They Work?

SKUs are a type of inventory tracking that involves combinations of letters and numbers assigned to items and variations.

You’ll have to build SKUs for each combination of attributes if your items have them.

There is no standard approach to make a SKU, because the goal of a SKU is usually to generate a code that only your business can use.

Aside from SKUs, there are 2 additional frequently utilized sorts of codes that identify items:

1. UPC number (universal product code number): It’s the 12-digit number printed below barcodes. Anyone with a barcode scanner can read the code and learn more about the product. It is a global code, which means it isn’t unique to any one business.

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2. Serial numbers: With a few modifications, they can be used to make any product unique. They’re typically utilized for electrical goods and are intended to keep track of who holds the item as well as its warranty information.

The following 3 points are some of the most prevalent reasons for why it’s critical to plan ahead when picking your SKU name:

  1. Industry standard: SKUs are a common method for businesses to manage their products throughout the supply chain. It’d be difficult to sell anything online without SKUs.
  2. Convey information quickly: SKUs allow sales, warehouse employees, marketing professionals, and shipping partners to quickly understand a product’s features. It also aids in the effective transmission of product information.
  3. Improve information retrieval and efficiency in warehouse procedures: This can help you produce more items with less effort. SKUs make it easier for warehouse employees to find, track, and check on items. SKUs may also assist you in ensuring that the right goods are delivered to clients, resulting in higher client satisfaction and a better perfect order KPI.

Let’s look at how companies create SKUs now that we have a basic understanding of them.

How to Make and Name SKUs

There are no hard and fast rules when it comes to generating SKUs.

We’ll go through several widely used SKU naming conventions below to get you started.

1. Create a Format

Naming SKUs in a standard format is the first step to ensuring that they are consistently structured and labeled.

To make your SKUs, use a mix of letters and numbers to determine the sequence in which you’ll order product features.

Item names that contain the product brand, size, color, or item type are examples.

According to best practices, only include the most prominent product characteristics in SKU names.

For example, your typical SKU format might be:

Name of manufacturer, color of the product variant, size

Consider the example of UDA-BL-10, which is the SKU for a blue Under Armour sneaker in size 10.

If you use a pre-designed SKU naming structure to create new goods your firm offers, you may offer them as separate SKUs.

2. Create a Coding System

The next step is to create a list of attribute codes for various features in your SKU names, such as brand names, sizes, types, and colors.

You may simply map the attribute name to the attribute code in spreadsheet software (such as Excel or Google Sheets) to do this.

Here’s how you might go about doing it for brand names:

For example, you may apply the same colors to other characteristics such as colors and sizes

The advantage of standardizing attribute codes for SKU naming is that everyone on your staff will be using the same key when assigning SKUs.

5 SKU Creating Best Practices

Here are some of the most popular SKU naming conventions and best practices utilized by businesses all over the world:

1. Ensure It’s Easy to Understand

It’s a good idea to use descriptive names for SKUs.

This allows various departments inside your firm – such as operations, distribution, and sales to understand exactly what product the SKU refers to.

The names of your items should also make it simple for team members to understand the various SKU components.

Begin by selecting the hue, size, category, and seasonal distinctions for your SKUs.

You may use digits to represent product sizes and letters to express hues and materials.

For Instance:

  • 2019 Winter Collection, Jackets, Medium, Purple = WC-JT-MD-PP
  • 2019 Winter Collection, Jackets, Medium, Yellow = WC-JT-MD-YL

Avoid including numerical indicators for colors in your designs since this might be perplexing and time-consuming to memorize (For example, 1 for blue or 2 for green).

2. Arrange Words Based on Importance

Consider placing the most essential SKUs first.

Another approach is to look at the product’s description and pick out the key qualities that stand out most.

Product information, such as the brand name, model number, color, or warranty status for your items, is useful.

Place the most essential or consistent aspects (such as brand name or model) at the beginning of the SKU section.

The characteristics of the product, such as size and color, should be assigned towards the end of the SKU element.

For Instance:

  • Holiday Treats, Chocolate bar, Small, Sugar-free = HT-CC-SMA-SF
  • Holiday Treats, Chocolate bar, Medium, Sugar-free = HT-CC-MDM-SF

The Edition and Product fields describe the edition and product, while the Size & Type section restricts the description to size and type.

3. Avoid Using Letters That May Look Like Special Characters

Another thing to think about is that certain letters and numbers appear similar, which might be confusing for team members.

In addition, you should avoid employing special characters.

Here are a few examples:

  • The number 0 and letter O appear to be similar in most fonts.
  • Excel will treat special characters like the forward slash “/,” as a data separator.
  • Symbols like @, >, <, *, don’t always have a standard, clear meaning.

Instead, use numbers and letters for your SKUs as shown in the following example:

  • Summer Edition, Running shoes, Size 10, Blue = SE-RS-10-BL
  • Summer Edition, Running shoes, Size 11, Blue = SE-RS-11-BL

4. Avoid Starting SKU Names With Zero

Another disadvantage of beginning your SKUs with the number zero is that certain data storage software may disregard them.

For example, if you put 04563 in Excel, it records 4563.

Avoid employing zeroes to begin your SKU name in order to avoid data storage concerns as a general guideline.

We believe you should avoid using numbers in the beginning of your SKU names at all costs.

This way, spreadsheets will be much easier to read.

For instance:

  • Home Decor, Scented Candles, Small, Pack of 4 = HD-SC-SML-PO4
  • Home Decor, Scented Candles, Small, Pack of 8 = HD-SC-SML-PO8

5. Don’t Use Manufacturer Numbers

Avoid including the manufacturer’s SKUs in your own SKU names, whether you operate an online business or a brick-and-mortar shop.

The reason is straightforward: if you sell goods from different manufacturers, using manufacturer SKU names might be perplexing.

Manufacturers have already put a significant amount of effort into making their products stand out and self-explanatory. You’ll need to figure out your own way to create SKUs.

For example, if the manufacturer’s SKU name is:

  • Sports Bra, Red, Band Size 36 = SBR-RD-BS36

You may personalize your SKU name to:

  • Sports Bra, Red, Band Size 36, Rib Cage 15 to 27 = SBR-RD-BS36-RC1527

What Should You do if you are Overwhelmed? (Which is not your fault)

As your company grows larger, the issues you face become increasingly complicated.

When you reach this stage, you must hand over control to the specialists so they can assist you in growing your online business while keeping your focus in your business growth only.

We here at Free cash flow, helping online businesses (like your business) to boost their revenue and doing what other firms miss.

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