What is a SKU? Stock keeping unit meaning
Every extra SKU adds stock, minimums and listings, so SKU count is a business decision, not a catalogue detail.
Definition
SKUA SKU, or stock keeping unit, is a unique code that a business assigns to each distinct sellable variant of a product, such as one scent in one size. SKUs are internal identifiers used for stock, ordering and sales reporting, and they differ from barcodes such as GTINs, which identify products across the supply chain.
How SKUs affect a product brand
A T-shirt in four colours and five sizes is one product but twenty SKUs. Each one needs its own stock level, its own forecast and often its own listing. If the factory’s minimum applies per colour, each new colour multiplies the first order. That is why ranges that look modest on a mood board can become expensive in the warehouse.
Define what creates a new SKU before you start: pack size, colour, scent, bundle, market-specific label. A product with different labelling for two markets is usually two SKUs, even if the contents are identical. Your SKU code should be readable to people, for example with a short category, product and variant segment, and stable once used. Do not reuse a code for a reformulated or redesigned product, because returns, complaints and sales history would then mix two different items and hide what actually changed.
Retailers and marketplaces add their own rules. Many require a GTIN barcode per sellable unit, and some limit how many new SKUs a supplier can list at once. Slow-selling SKUs also cost shelf space or storage fees, and buyers delist them. Check the rules of each channel before you assign codes, and drop weak variants before they become a storage bill.
Deciding which SKUs to launch first is part of assortment planning. The guide how to build an assortment matrix shows how to keep the first wave lean.
Related terms
Assortment matrix
A table that sets which products you carry by category, price tier, role and channel.
MOQ
The smallest quantity a supplier will produce or sell in one order, per product or variant.
Planogram
A diagram showing exactly where and how each product is placed on a retail shelf.
Sell-through
The share of stock received that a retailer actually sold to shoppers in a given period.
Frequently asked questions
Is a SKU the same as a barcode?
No. A SKU is your own internal code. A barcode such as an EAN or UPC carries a GTIN, a globally unique number that retailers and marketplaces use to identify the product.
How many SKUs should a new brand launch with?
As few as the channel allows while still telling a clear story. Each SKU needs its own minimum order and stock, so most new brands start narrow and add variants after sales data comes in.
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