What is a SKU? And Plugins that help you generate them

If you’ve recently started selling products, you might be wondering, ‘What is a SKU’? A SKU helps to track a specific product. But what you might not know is how it works behind the scenes.

SKU numbers are assigned to all of your items and allow you to organize your products easier. They’re great for your own product management, but they also have advantages for your customers.

Inventory tracking with SKUs is important for any business that sells products. Setting up inventory tracking correctly is crucial, and this begins with the correct setup of SKUs for your products. Let’s study SKU numbers in detail.

What is a SKU?

A SKU is known as Stock Keeping Unit, it is a unique number used to internally track a business’ inventory. SKUs are alphanumeric, and should provide information on the most important characteristics of a product price, color, style, brand, gender, type, and size, for example. This information in the SKUs should also be placed in order from important to least important or in other words, the most needed information to the least.

How are SKUs used?

Retailers use SKUs to track their inventory and sales, which can provide analytical data that are beneficial to have in order to develop relationships with your vendors and customers. But, remember: Each retailer won’t be tracking the same thing — so it’s important that you examine your business’ specific needs before you create your SKU architecture. So, how do you create a SKU architecture for your business? Follow these simple steps:

1. Ask yourself about the size of your stock: If it’s minimal, you may want to create an architecture that tracks customer type, such as adult, babies, kids, etc. If your stock is on the larger side, you may want to continue to break down the product’s traits after customer type to provide additional details on the product, like this: type > gender > size

2. Ensure the number sequence is unique: If your SKUs mirror something such as a manufacturer SKU or were duplicated for different products, you might be prevented from accurately tracking your inventory. Here are a few things to remember for your naming pattern:

• Stay between 8 and 12 characters
• Begin the number with a letter
• Never use zero
• Keep the format easy to understand
• Ensure each letter and number has a meaning

3. Keep the customer in mind: You’ll also want to remember what’s important to your customer about your merchandise. Do customers frequently ask about color? If so, you’ll want to keep the number that represents color at the beginning of your SKU so you can quickly provide your customers with the information they desire.

4. Choose your inventory system: If you use a point-of-sale system, most will allow you to create a SKU architecture within it. If you don’t have one and have a smaller inventory, you can actually create it by hand and on an as-needed basis. Or, you can use an online generator such as Primaseller or TradeGecko to help with the process.

How to use SKUs to boost your business

1. Track Inventory Accurately

Since SKUs are used to track product traits, they can be used to ensure your inventory is accurately tracked overall. This leads to one of the most important traits to track: availability. When you can continuously keep track of your products’ statuses, your SKU architecture can help you pinpoint when exactly to order new products so your merchandise never goes out of stock. This is referred to as a retailer’s “reorder point.”

And, most importantly, with accuracy comes efficiency and productivity. When you can keep track of your products in real time, it can help you better understand the evolving needs of your business.

2. Forecast Sales

When you can keep accurate numbers on your inventory, SKUs also help to forecast sales so you can anticipate your business’ needs. As a result, you can more easily keep your products in stock, which in return designates you as a reliable merchant to your customers and even vendors.

But it’s important to note first that when using SKUs to forecast sales, you’ll want to be more strategic before completely eliminating slow sellers from your stock. Some of your important customers may still want those products — and if you stop selling them, they may take their business elsewhere.

3. Make the most out of your biggest profit generators

Again, your SKU architecture can help you understand what your business’ most sought-after items are — and the least desired ones, too. Aside from knowing when to reorder and which items to take out of the inventory, did you know you can get even more creative with your highest-selling items — and maybe get them out the door faster?

By knowing what your business’ biggest profit generators are, you can make strategic product displays, ensure they’re easily accessible on your online store’s landing page, and it goes without saying, keep them always in stock.

4. Boost customer loyalty and satisfaction

Since SKU architectures can be used to anticipate reorder points, you can help your customer always find the product they sought out to purchase. And when you’re able to track reorder points, you can create a shopping experience with minimal out-of-stock statuses — which can result in an increased brand loyalty and satisfaction among shoppers. Plus, when a product actually becomes out of stock, your customers might be more willing to be patient rather than taking their business elsewhere.

5. Offer customers new suggestions

If you’re tracking multiple product characteristics through your SKU architecture, this type of information isn’t only limited to stock and sales analysis, it can also be applied on the sales floor. If a product is out of stock, you can use your SKU knowledge to direct your customer to a similar product.

This can be utilized online, too. Think of all the shopping websites you visit. When you click a certain item, the page usually includes similar items you may like. This is likely done through a retailer’s SKU architecture — where they’ve applied an algorithm to provide suggestions with similar SKU features.

SKU management

If you’re going to use SKUs, their management is incredibly important. SKU management allows you to analyze the cost of carrying each product so you can be sure that every piece of inventory meets the financial objectives of the business.

When done well, SKU management allows you to optimize your inventory levels and purchasing (and increase revenue). If done poorly, you have high inventory holding costs and less available capital. You can manage SKUs manually or you can take an automated approach.

Manual SKU management

If you go the manual route, you need to calculate two metrics — SKU ratio and sales ratio — and then compare them.

• Calculating SKU ratio – Start by looking at your product catalog and making a list of all your SKUs in a spreadsheet. For each SKU, note the price, how much it cost you, and the gross profit. (Subtract your cost from the price to determine your gross profit.)
  Then create gross profit ranges in your spreadsheet (less than $20, $20–$29.99, etc.) and note how many SKUs fall in each range. Divide the number of SKUs in a range by the number of total SKUs (and multiply by 100) to get your SKU ratio for each range.
• Calculating sales ratio – Using the same gross profit ranges, note the number of units sold (in a given period of time). Then divide the number of units sold in each gross profit range by the total units sold (and multiply by 100) to get the sales ratio for each range.
• Examining your findings – In a spreadsheet, compare the SKU ratio and sales ratio of each gross profit range. (If you’re more of a visual person, you can also plot this information on a graph to see how your SKU ratio compares to your sales ratio.)
  Your best-performing products fall in the gross profit range that has a sales ratio significantly higher than the SKU ratio. It means there is high demand for those products (and potential for generating more sales if you increase inventory or marketing).
  Your gross profit range where the SKU ratio is higher than your sales ratio? Those are your worst performers. It means there is too much supply and you should reduce inventory and marketing (or even stop selling the products).

Automated SKU management

That whole process may seem a little tedious, but don’t worry, you can automate SKU management. Automating your SKU analysis reduces costs and improves the accuracy of your data.

To automate the process, you want to leverage POS systems with integrated inventory management and other tools like bar coding. Using software to manage your inventory allows you to electronically track items in real time and automatically update inventory. In addition, built-in analytics help you create more efficient purchasing processes and more effective sales and marketing strategies.

What is a SKU generator?

Making your SKU sequence of characters is up to you, but it would take quite a bit of time to type up all of the SKU numbers every time you have a new product. This is particularly true for large stores. Therefore, a SKU generator makes meaningful SKU numbers without you having to think about them.

Why would you want to use a SKU generator?

Manually created SKUs may work fine, but even smaller stores should avoid them. Here are some of the main reasons/benefits you would utilize a SKU generator:

• To avoid any errors that may cause confusion in your inventory management system.
• To avoid any duplicates in your SKU system.
• Also, To quickly generate SKUs, saving you time.
• To instantly assign SKU numbers to new products in your store.
• To always stick to your previously created SKU architecture. Human error is bound to occur if you were to do this manually.
• To ensure that searching for a product is only a few clicks away. 
• To better organize stores with large inventory collections.

The Best SKU Generator Tools

1. QuickBooks Commerce Product SKU Generator Tool

TradeGecko is now known as QuickBooks Commerce. This SKU generator tool generates and assigns SKUs for all your items and product variants. A solid SKU categorization through this tool facilitates stock transparency. It helps to handle inventory with SKUs, track your inventory levels, set reorder points, and indicate when a fresh purchase order requires to be made.

Features:

• You can straightforwardly track product variations using an SKU system with stock accessibility. 
• Identify product shrinkage across the supply chain and facilitates stock transparency. 
• Assists in replenishing inventory with its better track and notify to enable a purchase order.
• Helps in pinpointing best sellers and items that are not performing well. 

Benefits:

• It turns stock accessibility effortless to determine
• It makes your products simpler to find and reference
• Assists you identify the most lucrative products

Installation: It is lightweight and straightforward to install.

Pricing:

• Founder plan costs $39 per month
• Lite plan costs $79 per month
• A small business plan costs $199 per month
• A comprehensive business plan costs $599 per month

Support: They offer technical support, for free, to all users.

2. Zoho Free SKU Generator Tool

Zoho SKU generator tool helps keep product naming steady, all-inclusive, and effortless to remember, even if you have a large-sized list of products in your inventory. When making SKUs for a giant company like Amazon, completing a Google search for a free SKU generator is the likely option. With this approach, you can import files of products to make your SKUs automated.

Features:

• SKUs are automatically generated for the products and they are further listed in one common area for you to download easily 
• Keep patterns and rules you set steady for your group, making sure all of your products are logically marked
• You can decide the sequence of characters that are involved in the process

Benefits:

• You merely need to set up a specific pattern using the tool and the product SKU’s will be generated precisely.
• The fixed pattern stays the same for a whole product group which maintains and sustains consistency.
• The tool will support and back your growing list of products and fresh variations offers better scalability.
• The naming is straightforward and completely rule-based, which helps to shun any of the defined process mix-ups.

Pricing: Free

Support:

Zoho provides a full suite of products such as CRM software, business email, and also enable invoicing; however, these are all paid tools. So, if you utilize any of those, you get direct customer support right through email. Conversely, you need to connect with the Zoho team for the free tools if anything goes wrong, but you cannot expect the same level of support as using the paid products.

3. WooCommerce Product SKU Generator Tool

This tool necessitates WooCommerce 3.0.9 or newer to generate SKUs for various products, variations, or both when the products are enabled for publishing or updates.

You can create SKUs for external or parent products through the product’s slug or ID.

For instance, a product with the slug wp-casual-jeans can have an SKU of wp-casual-jeans or 282 as per the product ID. This SKU will be created any time the product or that item is enabled.

If the product involved is variable, the plugin can create and automatically generate SKUs for the product variations if needed. Variation SKUs can either affix attribute slugs or variation IDs for every variation right to the parent SKU.

Features:

• Automatedly build simple and parent product SKUs with the help of the product ID or slug
• Automatedly create SKUs for diverse product variations when the product is enabled through publishing or is upgraded
• Create variation SKUs using the variation ID or attribute slugs
• Apply the mass update of products to compel SKU creation for multiple products effortlessly
• Accessible to bulk-generate SKUs for products generated before installing this particular plugin

Benefits:

• Generates SKUs for all product categories and types
• Enable bulk updating of your items and products
• Automatedly generates and creates SKUs for variations
• Determines whether all products with variations must have automatedly generated SKUs
• Determines if merely simple products must have automatedly assigned SKUs or all products

Installation: Active installations: 10,000+

Pricing: Free

Support:

The developer SkyVerge will answer your queries by the WordPress plugin forum. You can also easily connect by sending an email to the developers by its web portal.

4. SKUGen Product SKU Generator Tool 

The SKUGen Product tool enables you to generate SKUs by selecting a blend of codes created automatedly, using your product’s data. The SKUGen app is, at present, the only application on the Shopify App Store that enables SKUs for you swiftly and steadily. 

It enables the procedure by creating unique SKUs for various products and their variants. You also get preferences to set the defined rules for your SKU numbers, including product abbreviations, prefixes, automated numbers for individuality, and much more. You can also create an SKU from the list of your items in Shopify.

Features:

• Creates SKUs for items in a collection and set of items chosen in the admin products page
• Generates SKUs for products right in your store, in one run and save across barcode field
• You can blend elements like Prefix, PTA (Product title abbreviation), POA (Product options abbreviation), PTA (Product type abbreviation), and PVA (Product vendor abbreviation) to generate SKUs
• You can use code types to enable product preferences, product category, and product vendor abbreviation
• A code can be generated by a product tag or using meta-field

Benefits:

• The app can automatedly, effortlessly, and quickly create SKUs when you build a new product or while product updates
• The app is highly consistent, and you can rest assured that the SKUs will be generated as per set rules
• The tool creates unique SKUs, custom codes and even enable your product label printing

Installation:

The application is easily accessible and obtainable on the Shopify App Store.

Pricing:

It is free to install but has additional charges.

• $9.95 one-time pricing to unlock advanced preferences
• $1.99 per month for automated SKU creation
• $3.99 per month for enabling custom codes
• $7.99 per month for the premium version

Support:

Customer support is enabled by the Shopify dashboard when you are operating the SKUGen section. You can even contact them through a phone number or email on their web portal. 

5. The Auto-SKU Generator Tool from BigCommerce

The Auto-SKU Generator is a tool from BigCommerce to assist you in swiftly generating and allocating SKUs for product variants. It can save your time, efforts and enable you with unique SKUs. Once you have created product SKUs, you can fill in the inventory manually or utilize the import/export tool to increase efficiency levels. 

Features:

• The tool generates SKUs according to preferences, including Size, Color, Multiple Choices, Product Pick List, and Swatch.
• When naming SKUs, you can choose a series of elements that blends to create the name
• The tool has both default naming settings and customized settings using a specific naming convention for the SKUs
• Components can be utilized separately or in a blend when generating the SKU name

Benefits:

• Rules can be used for individual products and can even be applied to multiple products concurrently by assigning an option set in bulk.
• With controls and regulations, you can change product data relying on the value-combination or SKU, which the customer picks from their choices.
• You can allocate SKUs to the exclusive variants and the involved base product.

Installation: You can find the details at the BigCommerce help centre.

Pricing: Free if you have a subscription to BigCommerce. 

Support:

BigCommerce customer support is offered with a chat box, forums, social media channels, email, and a phone line. 

6. MageCloud SKU Auto Generator Tool

The tool automatically generates SKUs for different products that are physically created through Magento’s administration. The extension is precise for stores that do not have set SKUs coming from their external suppliers. It comes in the form of enterprise and community editions.

Features:

• Generate Numerically enabled and Alpha Numeric SKU codes
• Set and enable a Prefix or a Suffix string for diverse SKUs
• Set precise SKU rules for diverse Product Types and Categories
• Facilitates you to set up a minimum length for SKU string
• Automatedly enable or disable SKU

Benefits:

• Integrates smoothly and flawlessly with Magento
• Create SKU tags for your own products with the assistance of codes
• You can state a variety of diverse rules and have control over the process

Installation:

It offers a 1-click installation. You just need to create an account with MageCloud.

Pricing: Free

Support: For any queries on the functionalities or support, you can email them with details.

7. Primaseller SKU Generator Tool

Primaseller is effortless and trouble-free to use Inventory management software, which enables SKUs on online and retail channels. The free online SKU Generator tool from Primaseller easily creates SKU codes and manages your inventory effectively.

Features:

• Allows to track individual inventory and their numerous variants
• Place the details in order of significance
• Simplifies SKU formats, so they are simple to understand

Benefits:

• Smoothly and seamlessly manage customer queries
• Enhance the responsiveness and effectiveness to fulfill orders
• Swiftly provide customers with the details they demand

Pricing: Standard version costs Rs. 3000 per month.

8. Gorgias SKU Generator Tool

With this SKU generator tool, you can create a tailored SKU quickly. Then, repeat the process for your complete catalog to create a comprehensive list. Once you have entered the applicable data for all products, you can easily export the list in the form of a CSV to further utilize as you want. 

You can utilize the applicable codes to upgrade the Shopify dashboard and other platforms for optimized inventory management procedures.

Features:

• Enables to generate own codes rather than prefixing 
• Removes any part of your code that possess inappropriate details
• Avoids the utilization of special characters and spaces 

Benefits:

• Facilitate returns and supplier details when suitable
• For big-sized catalogs, it comprises a storage location
• Make SKUs simple to understand by setting algorithms

Pricing:

• $60 per month for the Basic version
• $300 per month for PRO version
• $750 per month for the Advanced version

Support: A chat box is available for direct support.

Conclusion

You need to start the process of creating a SKU architecture that allows you to manage your business’ inventory effectively while understanding how to grow and adapt to the ever-evolving needs.

The SKU for the inventory of a business needs to be simple to understand. A typical SKU will have the first part used for product grouping and the other part for a unique value, such as the date.