E Class | What is SKU

People who have just come into contact with e-commerce, logistics and other industries are often troubled by various nouns and terms. One of the most frequently used words is SKU, so what does SKU stand for? What is its meaning and function? Let's follow us, we will clarify it for you.

What is SKU?

SKU, the full name of Stock Keeping Unit, is the minimum inventory unit, which is the basic unit of inventory import and export measurement, which can be in pieces, boxes, pallets and other units.

For example, size XL, white, 021 T-shirt is one SKU each

The S-size, white, 021 T-shirt is another SKU

Therefore, multiple SKUs are required if the same product has multiple styles, sizes, colors, etc.

However, it should be noted that SKUs refer to the basic unit of inventory import and export measurement, which is the smallest inventory unit that is physically inseparable, rather than the smallest unit of the object itself. In use, SKUs should be handled according to different business forms and management modes.

For example, the packing size of light bulbs is: twenty boxes in a box, fifty pieces in a box.

So, chest, box, branch, which unit is its SKUs? This depends on the actual application scenario, for example, in the retail industry it may be one SKUs per unit, in the wholesale industry it may be one SKUs per box, and in the factory it may be a combination of larger units.

Therefore, SKUs can be minimum retail units, minimum sales units, minimum management units, inventory counting units, etc.

What's the use of SKUs?

From the first part, we know that SKUs are the minimum stock keeping unit, which is also an important basis for recording commodity circulation. So, what are SKUs for?

Let's start with the composition of SKUs. Each SKUS code can contain up to 40 characters. In the warehousing or logistics system, writing clear SKU code is conducive to improving the clarity of goods transportation, post-delivery management, and then effectively improving the delivery efficiency of goods, and providing basic data information for the later process optimization and production expansion.

In the field of e-commerce and retail, SKUs also play an important role. They can not only identify products and track inventory, but also ensure that customers can quickly and timely find the goods they want to buy. It is also possible to monitor turnover and data flow, and evaluate the information collected to analyze the profitability and efficiency of the business.

At the same time, SKUs can quickly locate the situation of goods in storage and inventory, and know the actual inventory structure such as the actual sales volume, damage rate and hoarding amount of goods, so as to adjust the production plan and sales strategy accordingly. Products that are consistent with trends in consumer behavior, based on the popularity of products, or seasonal and cyclical sales trends among different customer groups. The consistency of SKUs also allows products to have unique labels, which can control costs and risks in the process of testing and reordering.

In addition to SKUs, you may often hear about orders, inventory, AS/RS, WMS/WCS... So, what do they all mean? Please continue to pay attention to "E Class" column, we will explain more industry knowledge for you!