What is SKU and how can it Help Small Businesses?

Inventory management is a crucial step to ensure healthy cash flow and progress of any business. It’s among the most successful secrets to growing your small business. Luckily, SKU for business lets you achieve many goals related to inventory. So, here’s everything about SKU and how it can help small businesses.

What is SKU?

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Stock Keeping Unit (SKU) is a unique code made from combinations of letters and numerics. Each code element may indicate a product’s brand, name, category, and other details. It’s important to know that SKU is entirely different from the Universal Product Code (UPC), the standard 12 digits code necessary for product identification.

The SKU for business is typically between 8 and 12 characters and unique to different businesses. It helps you identify products, image stock, and more. For example, all the shirts in your business may have an SKU code starting with “SH” followed by characters that may indicate store location, size, and other appropriate product information. 

How to get SKU for Business

Here are important steps to get an informational, hierarchical, and accurate SKU system in your business:

Find the topmost identification: It begins by narrowing down your business’s most common and top categories. For example, it can be jeans, shirts, socks, etc. Also, it can be according to your various stores, for example, the name of places. This will help you identify products more accurately.

Find the sub-category: The top identifying category must be followed by a sub-category—for example, size, color, item type, sub-category to your product, etc. In addition, it can be a sales channel, variants, etc.

End SKU with number: You can end the SKU code with numbers like 003, 004, etc., to know the unique piece number.

Execute SKU in inventory management system: The inventory management system can be manual, automated, or small to large scale according to various businesses. You can use excel sheets, software another method to execute it.

Get barcodes: The unique barcodes corresponding to SKU numbers will be highly beneficial. 

Benefits of SKU for Business

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The several stages of small business growth include updating the system regularly for smooth working. Well, optimizing small sections, automating them, and creating a smooth workflow is equally important. 

The benefits of SKU codes for any business are:

Accurate inventory tracking: The unique number and its perfect classification give you an idea of inventory tracking. This may help you timely manufacture pieces in demand or hold manufacturing of which are already in great numbers. This ensures no overstocking of inventory and healthy cash flow.

Better customer satisfaction: With the right hierarchical SKU number, you know how one product differs from others and can provide customers with more accurate and real-time information. 

Increase Sales: With an SKU number, the customer can repeat the product purchase with a simple code. This makes the purchase journey very easy and profitable for any business.

SKU for business is necessary for better inventory management, reliability, sales, and customer satisfaction. So, develop it with the most practical categorization and notice the change it brings. 

 

Hi, I’m Linda Rawson. Founder of GovConBiz.

I help entrepreneurs build a business and lifestyle they love!

I am personally responsible for my company, DynaGrace Enterprises, winning millions in federal government contracts.

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