How to Create an SKU Number for a Product? Here's An Ideal Guide

How to Create an SKU Number for a Product
A stock keeping unit (SKU) number is a distinct number that is allotted to an item to distinguish it from the rest. This Buzzle article will tell you how to create an SKU number for a product.
BusinessZeal Staff
Last Updated: Jun 3, 2018
Quick Tip
Use simple logic to create SKU numbers for your products, don't use random combinations. Say, if you have a product, like "Summer Dresses for 2014, pink chiffon frock", an appropriate SKU number would be SD2014-CF-P.
While storing manufactured goods or products, every product needs to be named and labeled so that it can be recognized from the innumerable ones that exist. This is done so through a variety of codes, and one among those is a stock keeping unit (SKU) number. It is an alphanumeric identification that helps to identify an item and track it down for inventory purposes.

It is not the same as a bar code or a product model number. It is a unique identification number assigned to an entity to track it down, just like Global Trade Item Number (GTIN) or Australian Product Number (APN).
How To Create an SKU Number?
  • Typically, an SKU is associated with any purchasable item in a store. It is used by data management system software to track amounts or units of billable entities. It may or may not be visible to the customer.
  • There are a number of factors and conditions that need to be considered while creating this number. They vary according to different items and manufacturers.
  • You can take the first few letters from the supplier's name, then create three or four different combinations to identify each individual product.
  • The number can also be created by using the product manufacturer's part number. This is an easy way to create SKU numbers.
  • You can use the UPC number found on the product, if you have one available.
  • Create extra numbers or letters to add at the end of your SKU number to keep track of various attributes of the product, such as different sizes or colors for certain products.
  • Use numbers to identify each supplier you order from as well as to identify each of the products that you keep in inventory.
  • Use one or two letters to identify the condition of the item. For example, N=New, VG=Very Good.
  • You can also use a part of the UPC number. However, an SKU number is not the same as the UPC number. The former is about identifying the unique item type, while the latter is about identifying the stocking unit for inventory tracking purposes.
  • Thus, there are different SKU number systems that can create different combinations based on attributes, brand, vendor, collection, design, size, price, other dimensions, etc. This code is established by the merchant.
Examples of Types of SKU Systems
Example I
In this system, if the price of a product with a particular MRP (maximum retail price) changes, the items are billed separately. This is because some stock of products with the previous MRP may still exist. In this case, the SKUs are created differently. They can be incorporated into the bar code, and while the item is being scanned, the system recognizes the price and tracks the item.
Example II
One of the most commonly-used systems is to combine the similar attributes of an individual item. A major part of the SKU may mainly contain the description. For instance, consider a winter coat. Your SKU can be WNCTXLBL42. This indicates that the item in question is a winter coat, size XL, chest dimension 42 inches. Another example is SNRBKW10, which indicates that the item is a pair of Reebok sneakers, white color, size 10.
Example III
Some codes use the date. This is because they are required to be updated regularly. This particularly involves textiles and medicines. For example, a dress with a code beginning with MN2014 ... will be a monsoon dress of 2014, but in 2015, it may have a different print or some other changing attribute, that can be distinguishable only by the date. Another example is a denim jacket with a code DNJKT2014.
Example IV
One system can include similar items packed in the same carton. In this case, the box is the stock keeping unit, not the individual items. In case of say, mechanical devices, if there are 20 units packed in a blue box with the part numbers as 1189, 30 units packed in a yellow box with the same part number, you would have the SKUs as 1189BL and 1189YL, respectively.
Example V
In some systems, the UPC is used as a part of the SKU. This is because SKUs link the UPC from the vendor to the retailer. This system is used by manufacturers to check which vendor performs better with the same item.
Tips and Suggestions
  • Preferably, avoid using the manufacturer's serial number or even a part of it, since they are too long. Also, assuming you change the manufacturer's number at some point of time, all the SKU numbers will be rendered useless, since they contain a part of the manufacturer's number, which is no longer a part of your organization
  • Never  begin the number with a zero.
  • Use letters that can be a part of the item description, this will make it easier for identification. For instance, an SKU number for chocolate can start with 'CHO', for herbs, it can start with 'THY' (for thyme), 'ORG' (for oregano), etc.
  • To avoid confusion, do not use alphabets that can be mistaken to be numerals. For instance, O,I, etc.
  • Do not use confusing characters. This includes punctuations, like a comma or semi-colon, which might mislead the system software.
  • Symbols such as "<", ">", and "*" can confuse the SKU system. If you use an "/" in Microsoft Excel, the code can be mistaken to be a date. Try to keep your item numbers simple and alphanumeric where possible.
  • Do not overload the code with the item description.
  • Keep the numbers short―6 - 10 characters will suffice.
Be cautious while creating an SKU number. Also, remember to maintain records regarding the design and evolution of the number. Of course, when you have an inbuilt software, the code creation process will be done very fast, but proper documentation needs to be done regarding how the number was formed, what are the attributes, etc.