SKU
What is a SKU (stock keeping unit)?
A SKU, stock keeping unit, is the code a business gives each distinct item it stocks: the unit inventory is counted, picked and reordered by. If two items differ in any way that matters to selling or handling them (size, color, pack size, customer-specific labeling), they are different SKUs; one SKU can still sit in many locations, which are tracked separately.
What multiplies the count
- Size and color variants counted separately, which is usually right for picking and usually wrong for reporting at a glance.
- Customer-specific packaging or labeling of the same goods, which turns one item into two SKUs the moment it enters a 3PL.
- Promotional bundles with their own codes, which must decompose back to their parts for inventory to balance.
- Legacy codes kept alive after a migration because one report still asks for them.
A SKU structure that survives
Readable rules (what each segment means), one source for creating them, and a habit of retiring codes rather than parking them. The warehouse pays for structure every day: a picker reads a code, a counter reconciles one, a reorder triggers on one. When the code is ambiguous, all three pay for it in small errors that only show up at the count.