A unique alphanumeric code assigned to each distinct product or variant in inventory, used for tracking, ordering, and managing stock levels.
SKUs are the fundamental unit of inventory management. Each product variation (size, color, material) gets its own SKU. A well-designed SKU system encodes meaningful information — category, brand, size, color — making it easy to identify products without looking them up. SKUs are different from barcodes (UPC/EAN) which are standardized across retailers.
A clothing store might use SKU: MN-TS-BLU-L for Men's T-Shirt Blue Large. MN = Men's, TS = T-Shirt, BLU = Blue, L = Large.
Ensures accurate financial reporting and record-keeping
Helps maintain regulatory and tax compliance
Enables better-informed business decisions
Improves operational efficiency and cash flow management
SKU is an internal code created by the business for their own tracking. Barcodes (UPC/EAN) are standardized codes used across all retailers. One product can have different SKUs at different stores but the same barcode everywhere.
Use a consistent format that encodes key attributes: Category-Brand-Color-Size. Keep it 8–12 characters. Avoid starting with 0. Use letters and numbers, avoid special characters. Laabam.One auto-generates SKUs based on your rules.
A ratio that measures how many times a company's inventory is sold and replaced over a specific period, indicating sales efficiency and inventory management.
The inventory level at which a new purchase order should be placed to replenish stock before it runs out, accounting for lead time and demand.
Harmonized System of Nomenclature — an internationally standardized system of names and numbers to classify traded products, used in GST for goods classification.
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