What is a SKU?
SKU (Stock Keeping Unit) · Also called stock keeping unit, item, product variant, SKU count
A SKU (stock keeping unit) is an identifier a business uses to track one distinct product or inventory item. Flavors, sizes and pack formats are usually managed as separate SKUs.
What it is
A SKU is assigned inside a business’s own inventory system. A brand with three flavors, each sold as a single can and a four-pack, usually tracks six finished-product SKUs.
A GTIN is different: it identifies a trade item across trading partners. The UPC barcode on your package is a scannable symbol that carries a GTIN-12. A retailer can assign its own SKU to the same item your brand sells, so the SKU and the barcode are not interchangeable terms.
Consumer units and shipping cases are separate trade items and may need their own identifiers. A separate SKU also does not automatically mean a separate price.
Why it matters
Every variant you add can bring its own production minimum, packaging order, inventory and forecasting work. Judge each one on its sales velocity and contribution instead of treating a wider range as growth.
Before you launch a variant, record its product identifier, pack configuration, supplier, lead time, unit cost and selling price. Confirm which variants the buyer actually plans to list.
Worked example
Counting SKUs
- A tea brand sells 3 flavors as single cans and as four-packs.
- If it tracks each combination separately, it has 3 × 2 = 6 finished-product SKUs.
- Adding a 12-pack of each flavor adds 3 more, for 9 in total.
- Ingredients and packaging may have their own inventory SKUs too.
Common mistakes
- Assuming your internal SKU is a globally standard identifier. Trading partners use the GTIN.
- Mixing up a case and a consumer unit in orders or price lists.
- Assuming every size, formula or packaging change needs a new GTIN, or that none do. The GS1 GTIN Management Standard tells you which changes require one.
- Shipping a changed item before you have coordinated item setup with your trading partners.
Common questions
- How many SKUs should a brand launch?
- Launch the range your cash, production capacity and expected demand can support. A focused line is easier to forecast and keep in stock.