eCommerce

What is a SKU code? How to create SKUs, and examples & differences from UPC, EAN, and IAN

Mariluz Sampalo

Mariluz Sampalo

May 3, 2022

what is sku, use skus in your labels and logistics tasks

Inside this article

  • iconSKU code: Meaning
  • iconSKU code example
  • iconHow do I generate a SKU code?
  • iconDifferences between SKUs and other product codes
  • iconConclusions
  • Have you heard about SKU codes? If you have recently started your journey into online retail you may not know exactly what SKU codes are, how you can create SKU codes, or have even seen an SKU code example.

    Find out what SKU codes are, what they look like, how you generate SKU codes, and the difference between SKUs and other identification codes.

    SKU code: Meaning

    SKU codes —also known as stock keeping unit codes— are a combination of letters and numbers that are created for the identification of a specific product.

    Stock keeping units work as a product identifier. They can also be used to measure and manage stock levels in the warehouse.

    SKUs help manufacturers, suppliers, and other agents organize inventory and optimize & speed up a series of tasks.

    person scans an sku code to check availability in the warehouse

    For instance, SKU codes can:

    • Minimize the number of errors generated during the picking and packing
    • Speed up the picking and packing of products
    • Provide a more accurate overview of the number of items in the warehouse
    • Maximize warehouse resources, ensuring an optimal stock level
    • Give insights about what sizes or colors are the most and least sold
    • Ensure more traceability throughout the supply chain

    SKU code example

    A SKU code for a black T-shirt of size S can be TSH-000-S. The same T-shirt in a different size can be TSH-000-M. If the T-shirt is white and size M, the SKU code can be TSH-FFF-M.

    How do I generate a SKU code?

    Stock keeping unit codes tend to be automatically generated through an ERP system.

    To generate a SKU code, you should consider different attributes such as product type, size, and color.

    To generate SKU codes in a sensible and sustainable way for your sales volume, consider the different attributes you want to include in your SKU (product type, color, size, etc.) and the level of specificity. The more details you include in your SKUs, the easier it will be to identify the goods.

    After this has been set, you can configure your software system to take the first three letters of the product name (i.e. TSH for T-shirts), followed by the color (i.e. 000 for black) and the size.

    If you sell different types of black T-shirts, this example will be too generic and you will need to include more details to avoid creating duplicate SKUs.

    If the SKUs aren’t unique, errors and confusions can happen in the picking and packing process, causing shipping issues later on.

    Differences between SKUs and other product codes

    There are some differences between SKU codes and other types of product codes such as UPCs (Universal Product Code), EANs (European Article Number), and IANs (International Article Number).

    1. SKUs are typically used in internal processes: product production, order processing, and shipping. UPCs, EANs, and IANs are standardized and used both inside and outside the company’s facilities.
    2. SKUs have a similar function to UPCs, EANs, and IANs, but they look different. UPCs, EANs, and IANs include barcodes, while SKU codes don’t. SKU are alphanumeric codes with 8 to 12 characters. They aren’t standardized, so they can be created according to the wishes of each company. UPC codes are purely numerical (12 digits). UPCs are standardized worldwide. EANs combine the country code (in the form of letters) with numbers. They are standardized at a European level. IAN codes are made up of 13 characters that include a country code and product code. They are internationally standardized.
    SKU UPC EAN IAN
    Alphanumerical Numerical Alphanumerical (country code) Alphanumerical (country code)
    8-12 characters 12 digits 13 characters 13 characters
    No barcode Include barcode Include barcode Include barcode
    Non standardized Standardized Standardized Standardized

    As you can see, the main difference between SKUs and other identification systems such as UPC, EAN and IAN are: the fact that they are standarized, while SKUs aren't, and that SKUs don't include a barcode.

    Implementing the use of SKU codes in your online store requires a software system to automatically create these codes, since doing it manually involves a considerable investment of time and resources.

    An example of this type of software would be an ERP system that not only creates these SKU codes, but also monitors production tasks, classification, inventory management, and other tasks related to order processing such as picking and packing.

    To further streamline these processes, use Outvio and make your post-checkout operations run smooth, reducing the workload in departments such as customer support and warehouse, and increasing the speed and efficiency in your online store.

    Optimize warehouse management with our tips on warehouse design and building a warehouse network.

    Conclusions

    Now that you know what SKU codes are, what they are used for, how to generate them automatically, and the advantages that come with using SKUs, you have likely decided whether or not a SKU system makes sense for your business or if it’s better to stick to UPCs, EANs, or IANs.