How to Come Up with SKU Numbers [2023 Update]
In this article, we will explore how to come up with SKU numbers and apply it to a real-world example to better illustrate the process.
10 Steps to Create SKU Numbers
Over the years we have refined our process for creating SKU numbers. Here's our step-by-step guide to help you come up with your own SKU numbers:
1. Purpose Definition:
Clearly understand the primary objective behind creating SKUs. Do they need to convey information about product categories, brands, sizes, or other aspects?
2. Format Selection:
Choose between alphanumeric (e.g., SH01BL) or purely numeric (e.g., 12345678) systems. Alphanumeric often offers more informational depth.
3. Consistent Length:
Select a standard length for your SKUs. Using consistent lengths like 8 or 12 characters helps avoid confusion.
4. Segmentation Strategy:
Divide the SKU into meaningful parts. For example, a segment for product category, another for size, and perhaps another for color or variant.
5. Avoid Confusion:
Use characters that are distinct to minimize human error. Avoid potential mix-ups like '0' and 'O' or '1' and 'I'.
6. Implement Prefixes:
Begin your SKUs with category or brand prefixes which can aid in organization and quick product identification.
7. Unique Segment:
Ensure a part of the SKU is a unique identifier for each product so no two products share the same SKU.
8. Plan for Growth:
Design your system to be scalable. For numerical sequences, don't start too low, allowing room for product additions.
9. Consistency Rules:
Decide on rules like capitalization, avoiding special characters, and train staff on them. This keeps SKUs uniform and reduces errors.
10. Review and Test:
Before a full rollout, test the SKU system in practical scenarios and make necessary adjustments. Periodically review as the business evolves.
Example of Creating SKU Numbers
SoleStride Footwear, a rising shoe retailer, is introducing a tailored SKU system to optimize inventory and sales. They will segment SKUs by type, gender, color, size, and unique ID.
1. Purpose Definition:
SoleStride wants SKUs that convey shoe type (running, trail, casual), gender, color, and size, allowing quick identification and insights into sales trends.
2. Format Selection:
They opt for an alphanumeric system, offering richer informational content than a purely numeric approach.
3. Consistent Length:
Each SKU will be 10 characters long, ensuring easy readability and system uniformity.
4. Segmentation Strategy:
The first two characters denote shoe type: "RU" for running, "TR" for trail, and "CA" for casual.
The next character represents gender: "M" for male and "F" for female.
Characters four and five identify color, e.g., "BL" for blue and "RD" for red.
The last five characters signify size and a unique identifier, e.g., "09001" for size 9, first item.
5. Avoid Confusion:
SoleStride avoids the use of zeros in the beginning of the unique identifier segment, minimizing potential confusion with sizes.
6. Implement Prefixes:
Their SKUs always start with shoe type and gender, e.g., "RUM" for men's running shoes, ensuring immediate identification.
7. Unique Segment:
The last five characters provide a unique identity to each shoe, ensuring two products never have identical SKUs.
8. Plan for Growth:
The unique identifier segment starts from "01001" (for size 1, first item) and has room to grow, anticipating more product additions.
9. Consistency Rules:
SoleStride maintains all characters in uppercase and avoids any special characters to prevent system errors or confusion during data entry.
10. Review and Test:
Before system-wide adoption, SoleStride tests their SKUs in various departments, ensuring the format is intuitive and meets all operational needs.
For example, a men's running shoe that's blue and size 9 could have an SKU of "RUMBL09001", while the next shoe in the same category might be "RUMBL09002".
We hope that you now have a better understanding of how to come up with SKU Numbers for your inventory.
