Most retailers use the coding system commonly known as SKU (Stock Keeping Unit) to keep track of their inventory and also take a measure of how their sales are going. Moreover, the use of SKUs can be very supportive, especially when the stores require knowing when to order the products and which items move very fast versus those that do not. So, they can make a wise decision on what to keep on their shelves.
- Using the SKU allows the retailers to keep the track of the cost, product choices, and also manufacturers of merchandise conveniently
- Retailers can utilize the next sequence of numbers in the SKU to group the products together for the investigation
- Inventory supervision is a core operation of the SKU and it enhances the experience of customer shopping
- Another major benefit of using SKU is in advertising because it allows the retailers to advertise their SKU, instead of a manufacturer model number
Why is it Necessary To Use A SKU?
Basically, the stock-keeping unit tracks the cost, product choices, and also manufacturers of merchandise. This SKU is often utilized to track an inventory and also can create the tracking information on sales very simply, so you can maintain the retail business more profitably. Normally, the SKUs are divided into several categories and classifications. Even most retailers can utilize the next sequence of numbers in the SKU to group the products together for investigation. The next number may be a color indicator.
How SKUs Are Used?
When you are purchasing by using SKUs, you are able to choose the items to display as suggestions. Simply, the company has linked a different SKU with its entire recognizing qualities to each product. When you look at a blender, it can display other blenders you may like. But, you will not see just any blender; rather you will see the ones that have similar characteristics based on the SKU information. Even most of the POS methods will enable you to make your own SKU hierarchy or structural design. Before you make a sophisticated method for your account, you can simply think about what you wish to track. With this SKU item, a retailer is able to track its sales and inventory via detailed reporting. However, this reporting can be shared with the vendors to discuss good terms and dating as well.
Other uses for SKU
The inventory supervision is a core operation of the SKU, but also it can enhance the experience of customer shopping. Nowadays, the store assistant can scan the SKU to discover out what is in stock for a customer quickly, which may require a substitute version of a product. Being able to find your stock levels electronically, minimizes the time to care for a customer. Another major benefit of using SKU is in advertising. With its spirited setting of retail today and each one matching cost, having a different SKU can assist to safeguard your margins.
Also, most of the retailers will advertise their SKU, instead of a manufacturer model number. Moreover, it assists to minimize the practice of customers visiting shops to compare the costs for items, which they intend to purchase online instead. Thus, unlike the universal product codes, the SKUs are not at all universal, which means that each retailer has its individual set of SKUs for its stock.
References: 1 https://www.investopedia.com/terms/s/stock-keeping-unit-sku.asp
References: 2 https://www.acceleratedanalytics.com/blog/2019/09/07/what-is-a-sku-in-retail/
Last Updated on October 30, 2022 by Magalie D.
Magalie D. is a Diploma holder in Public Administration & Management from McGill University of Canada. She shares management tips here in MGTBlog when she has nothing to do and gets some free time after working in a multinational company at Toronto.