Stock and manufacturing glossary
SKU
Stock keeping unit
A SKU (stock keeping unit) is a unique code you give each distinct product you stock and sell, down to its size, colour or pack. It lets your team identify, count and reorder exactly the right item, where a product name alone can be ambiguous.
Why it matters to your business
“Blue shirt, large” means different things to different staff. A SKU removes the doubt. It makes billing faster, stock counts reliable and reorders accurate, and it lets you see which exact products sell and which sit on the shelf. As your range grows beyond what any one person can remember, SKUs are what keep the stock records usable.
How it works
A garment retailer sells one round-neck T-shirt design in 3 colours and 4 sizes. That is one product but 12 SKUs:
| SKU | Colour | Size | MRP |
|---|---|---|---|
| TS-RN-BLU-S | Blue | Small | ₹499 |
| TS-RN-BLU-M | Blue | Medium | ₹499 |
| TS-RN-BLU-L | Blue | Large | ₹499 |
| TS-RN-BLU-XL | Blue | Extra large | ₹549 |
| … | Black, White | S to XL | ₹499 to ₹549 |
At month end, the stock report shows blue medium sold out while black extra large has not moved. Without separate SKUs, both would be hidden inside one “T-shirt” line. With them, you reorder blue medium this week and hold back on black extra large until it starts to move.
Common mistakes
- Codes that carry too much meaning. Codes that include the vendor or price break when those change. Keep them about the product itself.
- Duplicate items. The same product entered twice under slightly different names splits its stock and sales. Search before you create.
- Reusing old codes. A discontinued SKU’s code should not be given to a new product, or past reports get mixed up.
- No barcode. If products do not come with one, print your own labels for the SKU so billing and counting can use a scanner.
- Too many SKUs kept alive. Mark discontinued products inactive so they stop cluttering billing searches and stock reports, while their history stays intact.
Questions about SKU
What is the difference between a SKU and a barcode?
A SKU is your own internal code for a product. A barcode is a machine-readable label, often the manufacturer's EAN code, that a scanner reads. One SKU can have several barcodes, and you can print a barcode for a SKU that has none.
Is a SKU the same as an HSN code?
No. The HSN code classifies goods for GST and many different products share the same one. A SKU is unique to one product in your own range.
How should I create SKU codes?
Keep them short, unique and readable, with fixed parts for the product, variant and size, such as TS-RN-BLU-M for a round-neck blue T-shirt in medium. Avoid spaces, and do not reuse a code for a different product.
Should every size and colour be a separate SKU?
Yes, if you stock, price or reorder them separately. Otherwise you will know that you have T-shirts, but not which sizes are running out.
Updated .