What Is SKU Shopify and How to Manage Your SKUs Effectively?

For any store merchant, running an ecommerce business requires an efficient process especially on a platform with millions of users like Shopify.

There are over 6 million websites using Shopify to run their online stores according to statistics. One procedure you should be familiar with is using the SKU or Stock Keeping Unit to track the inventory.

A SKU Shopify is not really required for small shops with less than ten products, but if you have a store with hundreds or thousands of products or more, using SKU can undoubtedly make stock inventory much easier.

In a small store, it is much quicker to use an SKU to identify products with lengthy titles.

Hence, SKU is essential for those who own a business. Do you want to know how to make SKU numbers in Shopify with useful tips that we have compiled? Let's take a look at this article!

Outline

• What Is SKU in Shopify?
• Why is SKU Shopify Important?
• How Does a SKU Work?
• How Does a SKU Code Look Like on a Print Label?
• Where Do Companies Use Stock Keeping Units?
• How to Create Shopify SKU Codes
• Tips on How to Manage SKU Codes on Shopify Store Inventory Tracking
• FAQ
• Conclusion

What Is SKU in Shopify?

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It is a unique identifier given to products (including product variants).

The SKU system is used by online merchants to identify and track inventory for their ecommerce store.

A Shopify SKU is a one-of-a-kind code made up of numbers and letters that you can assign to products on your Shopify website. They aid in the identification of product details in your online store.

An SKU can assist you in tracking the characteristics of your products.

Here are the most common elements that shop owners use SKU codes to identify.

• Manufacturer
• Brand
• Styles
• Sizes
• Color
• Product details
• Pricing
• Product code
• Product variant code
• Categories

SKU stands for stock-keeping unit and it is not the same as a model number. They are unique codes used by online store merchants to manage inventory efficiently.

They allow you to track your inventory and report on sales internally. You can also use the Sales by product variant SKU report to help analyze your sales.

SKUs are not the same as barcodes or UPC codes either. So to differentiate them, while barcodes are globally unique and issued by a standards organization, SKU codes can be used by your online shop which is much simpler. Use unique SKUs for each product variant to ensure accurate inventory tracking and reporting.

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Why is SKU Shopify Important?

You can create your own SKU format when selling products on Shopify to streamline the process and track your inventory across all locations which can help to avoid the following issues:

• Running out of in-demand stock
• Mixing up orders
• Delivering the wrong item to customers
• Losing track of the inventory

Therefore, having your own product SKU system allows you to accurately track each unit of product sold on your Shopify store.

Many business owners are using SKUs to track and store inventory. Additionally, they label their products with the SKU to make exchanges and returns easier and to respond to inquiries from customers about particular items.

How Does a SKU Work?

SKUs are stored in the software database of an internal tracking system.

SKUs are used to quickly identify products in your store, track the location of items outside of inventory, and track the location of a product inside a warehouse.

Given that SKUs are unique identifiers for computers and ecommerce developers, they are easier to work with than other data such as product titles.

When you are presented with similar items from the same collection, on upsells and cross sells, SKUs can be used in development.

A SKU typically consists of letters, numbers, and dashes.

A SKU number can be simple for small stores with small inventories, but more complex SKUs can be found on complex inventories with thousands of products or more.

SKU codes are human readable, and you do not need software to read and understand them (though software can help).

How Does a SKU Code Look Like on a Print Label?

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The SKU code is the one above.

The UPC code is the one below.

As you can see, the composition of an SKU code differs from that of a UPC code. A SKU code can be as long as the product owner wants. A UPC code, on the other hand, can only have 12 characters.

Where Do Companies Use Stock Keeping Units?

Businesses use stock-keeping unit (SKU) codes to identify and track the inventory of the following areas:

• Retail stores
• Online stores
• Warehouses
• Printed catalogs
• Online catalogs
• Fulfillment centers
• Other places that need inventory management and tracking

SKUs are essential to eCommerce operations, and they become even more important as your catalog grows. You may keep track of your products at various stages of the inventory management process by manually or automatically assigning an alphanumeric or numeric code to them. Here are some of the points where it helps with your inventory management:

Inventory Receiving

SKUs are first required to identify your products while they are being received. You'll need to know how many, where, and which product variations you have as soon as your products are on the warehouse shelves. 

Your warehouse management team will have access to correct information about incoming inventory if each item is marked with a scannable SKU. Your products won't be able to be organized when they arrive without SKUs. 

Cross-Channel Sales

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Cross-channel sales are the second situation in which an SKU is required. You won't be aware of when products are in or out of stock across different sales channels (Amazon, eBay, offline, etc.) if your online store and other marketplace sales aren't in sync with a special internal code to identify transactions.

Order Fulfillment

The choosing, packaging, and shipping procedure is the third time that it is crucial to scan products for an SKU code. You simply need to be aware of what you're sending to clients while finishing orders. The procedure will be easier, faster, and more precise thanks to your internal code. SKUs aid in ensuring that your customers receive the right orders in a timely manner. 

Returns

An SKU becomes significant at the latter end, during the returns procedure. If you have the product's identification on hand, you will know where to put it in the warehouse and whether to liquidate it or throw it away. This is made practicable and your stock records are kept up to date by your unique identification. 

How to Create Shopify SKU Codes

Shopify makes it easy to generate SKUs for products. Simply select the product from your Shopify store, enter the desired SKU code, and click "Generate SKU". This will create a one-of-a-kind SKU for the product, which you can then use to track inventory and market it.

Make a Code in a Fixed SKU Format

It is critical to create an SKU format with a fixed order. To make tracking easier, I recommend using stock-keeping unit codes that begin with letters rather than numbers.

Use a dash to separate the letters from the numbers in your code. Then, after your letter sequence, add a number sequence.

Here are some examples:

• SKU-1111
• SKU-1112
• SKU-1113
• SKU-1114
• SKU-1115

As you can see, the ascending order of the numbers makes it simple to keep track of them.

Avoid using the number 0 in your SKU because it may be mistaken for an O.

Determine the Number of Codes Required

The more products you have, the more SKU numbers you'll need. Thus, retail stores or online stores with large inventories may require longer codes.

However, to make your Shopify SKU codes easier to read and understand, keep them as short as possible.

If your SKU codes are too long or complex, they will be difficult to read and may cause inventory management problems.

Step-by-Step Guide

Do you want to know how to add a variant on Shopify? Here are the steps you need to know to add an SKU to your products in Shopify:

1. Sign in to your Shopify account and select admin.
2. Choose from the products menu on the page's left side.
3. Then you must select Add a New Product.
4. The new page will appear after that. Then scroll down until you find the "Inventory" section.
5. You must now enter your SKU code into the SKU input box.
6. Once you've correctly entered the SKU number, click the save button.

And here's a basic way to create SKUs sample:

You can simply base it on the product name title: "Melancholy Thistle Cologne - 30ML" so here we input the brand name first then the product title with its size.

Here you can see, we were using the underscore to separate the letters and numbers.

To avoid even more confusion in your SKU codes for simple stores with a few products, use a dash or underscore to separate the part with letters from the part with numbers.

This way, your employees will always know that the letters will always be on the left side of the dash or underscore and the numbers will always be on the right side.

Tips on How to Manage SKU Codes on Shopify Store Inventory Tracking

An example of a bad SKU format:

An example of a good SKU format:

Put your code on products and product description

The first letter can be the first letter of the product type, then the color. If you’re creating an SKU code for blue men’s sneakers, the unique code could be “MSB-115.”

Group SKUs by categories

If you're selling T-shirts, you should label them by color. Plain women's shirts in blue, pink, white, and red, for example, could have these SKU codes.

• PWB-111
• PWP-112
• PWW-113
• PWR-114

Don’t use special characters

You may use only numbers or a combination of numbers and letters. Avoid using a format in which the numbers 0 and 1 are confused with the letters O and I.

Special characters, symbols, and spaces should be avoided because they can cause issues when searching for products in Shopify by SKU and in other computer programs such as spreadsheet software. Dashes and underscores, on the other hand, are useful for separating groups of numbers and letters that represent product attributes such as style, color, size, pattern, or even a storage area.

Keep the length short

Keep your SKUs as brief as possible, ideally no more than 16 characters. You may be able to use an SKU format as short as 4 to 8 characters depending on the number and variety of products you sell.

Keep SKU numbers simple and understandable

Use an SKU format that makes sense to your staff and can assist with order picking and packing. Every letter and number in an SKU must serve a purpose.

Keep it unique

SKUs within your Shopify admin should be unique for effective tracking and sales reporting, and no two product variants should have the same SKU in their details. For example, if you sell a T-shirt in various colors, which are represented by different variants, each variant should have its own unique SKU.

Example SKU formats

Juanita owns an apparel store, and each of her items has a brand, style, and size. She selects the ####-###-### ten-digit numeric SKU format. Brand, style, and size are indicated by the digits separated by hyphens.

For example, she uses the SKU 4225-776-3234 for pants with the brand 4225, leg style 776 (boot cut), and waist and length measurements 32x34.

Karl prefers to sort and store his wooden pen products by wood type, ink color, and point size. He chooses the alphanumeric SKU format ###_###_##. WAL_BLK_25, for example, denotes a walnut pen with black ink and a 2.5 mm point.

FAQ

What are Some Tools to Create an SKU in Shopify?

Many tools that can automatically generate SKUs are available for ecommerce businesses, warehouses, and dropshipping businesses such as: 

• 3DSellers
• Katana
• Gorgias
• SKUGen

• Zoho

How Do I Get a Shopify Product SKU?

You may have noticed as an online retailer that some products have an SKU assigned to them while others do not. So, what exactly is an SKU, and how can you obtain one for your products? A SKU (stock keeping unit) is a unique identifier assigned by a retailer to a product.

What Does SKU Mean on Shopify?

A SKU (stock keeping unit) is a unique identifier assigned to each product in a Shopify store. A SKU is automatically assigned to every product when it is created, but you can change it at any time from the admin's Product details page. If you're manually entering inventory into your Shopify store or migrating products from another platform, you may need to edit a product's SKU.

What are the Advanced Uses of SKUs in Shopify?

It can track product variants and options, multi-channel selling, analyze sales and performance data. Additionally, it makes the process of deciding which high-demand products to keep and streamlining warehousing data which is more straightforward.

Having a unique SKU for each unique item and product variation makes physical inventory counts much simpler. You can utilize SKUs if a product will run out of stock or if you want to suggest a comparable item to someone.

A SKU's mid-level identification can be changed to produce goods that are similar yet have small differences. For instance, blue rather than green and small as opposed to large. You won't be aware of when products are in or out of stock across different sales channels (Amazon, eBay, offline, etc.) if your online store and other marketplace sales aren't in sync with a special internal code to identify transactions.

Conclusion

Yes, Shopify can generate product SKUs. This can be beneficial to businesses because it allows them to more easily track their inventory and ensure that they are always stocked with the right products.

We hope that our guide has given you enough information to understand stock-keeping units. Don't be afraid to use the advice we provided when implementing your own SKU system.

Even though it isn't the most exciting aspect of running an ecommerce business, SKU management is critical because it helps streamline your operations.