Stock Keeping Unit (SKU)
A Stock Keeping Unit (SKU) is a unique code that identifies a distinct, individual product — a specific item in a specific size, colour, variant and pack — for the purposes of tracking inventory. Each unique combination of attributes gets its own SKU, so a single product line may have many SKUs (e.g. a shirt in five sizes and three colours is fifteen SKUs).
SKUs are the fundamental unit of inventory management: stock levels, locations, sales, replenishment and forecasting are all tracked per SKU. They are internal, business-specific identifiers (unlike the universal GTIN/UPC barcode shared across retailers) and typically carry meaning in their structure. The number of SKUs a business manages (its "SKU count") drives the complexity of its warehousing, slotting and forecasting. Clean, well-managed SKUs are the foundation of accurate inventory, order fulfillment and analytics across warehousing and retail.
Everything in inventory management happens at SKU level — stock counts, locations, replenishment, forecasting and sales analytics all key off it. A messy or inconsistent SKU scheme corrupts all of that, while clean SKUs are the foundation of accurate stock and fulfillment. It is the atom of inventory that warehousing and retail systems are built on.
What is the difference between a SKU and a barcode (GTIN/UPC)?
A SKU is an internal, business-specific identifier; a GTIN/UPC is a universal barcode shared across retailers for the same product.
Why does SKU count matter?
More SKUs mean more complexity in warehousing, slotting, forecasting and inventory management.