If you want your e-commerce business to be as successful as possible, you need to understand what SKU codes are. These “Stock Keeping Units” can make all the difference to your sales.
As an e-commerce business owner, you know inventory tracking allows you to monitor sales and how much product is being moved. This information is imperative to successfully forecast supply and demand, which in turn, will help you make the most of peak sales periods.
What Is a Stock Keeping Unit?
An SKU is similar to a barcode on an item for sale. It is a code that identifies a product, so inventory can more easily be tracked.
However, unlike barcodes, which are universal codes to identify a certain product, an SKU code is specific only to the retailer.
Universal Product Codes are used to identify a specific product across all stores and platforms.
Details in an SKU code include specifications about the product, such as style, size, color, etc. Whatever details differentiate similar products from each other should be included.
To assign an SKU to a product, give each detail a unique value. The SKU code for a specific product will be a string of these values. For example, a men’s medium-sized pair of red Eddie Bauer shorts might have an SKU code that reads something like EB-M-SH-RED-MED.
Just be sure that the values you assign to details are easy to understand and consistent across your business.
These details allow you to keep track of every product. They also help to ensure your customer receives the exact product they expect.
How Are SKUs Helpful to Your eCommerce Business?
SKUs provide invaluable data for your inventory tracking system. They allow you to know exactly where your stock is. Naturally, this helps you to keep track of the supply and demand of your products.
By keeping track of SKUs on your online shop, you are able to automatically keep track of inventory. This also allows you to give your customers an accurate selection of the products and product variations you have available.
When each of your products has an SKU code, you will be able to track discrepancies in your inventory more easily. Theft and shoplifting are detected faster because you are able to trace exactly how much of your stock is being moved.
By tracking your inventory, you will begin to see patterns in demand. Once you are able to determine consistent rises in demand, you will be able to properly forecast your sales, allowing you to make the most of peak sales periods.
Along the same lines, tracking the movement of your stock will also help you determine which marketing strategies and campaigns work best. You will be able to revise your marketing tactics using data you gain from tracking SKUs.
SKUs are especially helpful when it comes to working with a third-party logistics provider (3PL) such as Smart Parcel 24/7 (SP247). Knowing how many SKUs you have helps your 3PL make warehouse space for your products.
In our SP247 warehouse facilities, we store each SKU on a separate shelf or bin, so we can efficiently pick, pack, and ship your orders.
SKUs allow us to streamline fulfillment, so orders are always completed correctly and on time.
If you are looking for a 3PL to help with warehousing, fulfillment, or shipping, contact Smart Parcel 24/7 today. Our state-of-the-art customer service is willing and ready to help with any of your logistics needs.