A SKU naming machine pumps out a new SKU name.

Category:

SKU Naming: How to Properly Name Your SKUs

Whether your business starts out with two products or two dozen products, it’s best to create a smart SKU naming strategy as early as possible. Many ecommerce companies that start out with only a few products don’t consider how important this aspect of inventory management truly is, yet proper SKU names are an integral factor in efficiently scaling a business.

When selling your products through B2B retail or wholesale channels, SKUs allow easy identification of products in your inventory, systems, and sales orders.

Read on to learn about why SKU naming matters for your business goals, and learn how to properly name your SKUs for efficiency.

What is a SKU?

SKU is an abbreviation for Stock Keeping Unit. A SKU is made up of letters (and often numbers), and is used to name a specific product for inventory management purposes.

The letters and numbers within a SKU are abbreviated and are designed to distinguish products from each other by specifying different variables. SKUs may include naming schemes that indicate the product’s manufacturer, name, model, size, color, description, material, packaging, warranty terms, or other specified parameters.

Product SKUs often appear on the product, on a sales order, inside inventory management software, and on the warehouse shelf or bin that stores the product.

SKUs are unique to your business, so the SKU naming scheme you use in your inventory management system may differ from the SKUs of identical products you order from a manufacturer. Also, note that SKUs are different from barcodes and UPC codes.

For more info about SKUs, check out our blog: What is a SKU? 3PL Advice for eCommerce Inventory Management.

What is a SKU?

Why does it matter?

Properly named SKUs are an important piece of your company’s inventory management strategy. Good SKUs can be read and understood by staff and can help staff understand what they are looking for – or what they are looking at.

Benefits of proper SKU naming include:

  • Easy identification of products and their variations
  • Conveying information quickly
  • Increased efficiency, accuracy, and fulfillment speed
  • Decrease fulfillment errors
  • Improved quality control
  • Makes work easier for staff (inventory manager, warehouse staff, customer service, sales team, operations, etc.)
  • Help to scale your business

If you are outsourcing fulfillment of your products, proper SKU naming is essential.

SKUs help with sales forecasting

SKU naming also helps you track your inventory at a deeper level, so your product manager can forecast inventory needs with a better understanding of sales data and trends. This will allow you to more accurately predict which product variations you need to purchase more of, so you can avoid stale inventory of less popular products and becoming out of stock on popular SKUs.

Best practices for SKU formatting

Determine what product variables are most important to distinguish

When reviewing products in your inventory, which are the most important variables to note? Some of the most important indicators may include the product’s manufacturer, name, model, size, color, description, material, packaging, warranty terms, or other specified parameters.

Examples:

  • If you sell coffee mugs, factors may include: design, size, and color.
  • If you sell apparel, important factors may include: brand, item type, material, color, size.
  • If you sell dining sets, factors may include: brand, item type, material, color, size, and quantity of items within the set.
  • If you sell keyboards, factors may include: brand, model, color, warranty, and accessories.

Arrange the varying terms in order of importance

Most important factors (such as item type or brand) should be indicated in the first section of the SKU. The last section of the SKU should indicate the unique variables (such as color or size).

Stick to one SKU naming formula

For ease of identification, choose the formula that will work best for your business and stick with that when naming all of your SKUs.

Make SKUs easy to read and understand

The more straightforward your SKU naming strategy is, the more efficient this aspect of your business will be. SKU naming affects various roles within your company including your operations manager, sales team, warehouse staff, and customer service team. Name your SKUs in a way that is obvious enough that staff members can read and understand SKU sections with a bit of training.

Keep SKU sections short

You don’t need to include full words in each section. The color descriptor “black” can be reduced to “Bk”. Design descriptions such as “Marilyn Monroe” can be reduced to “MM”

Avoid confusing letters and numbers

This should go without saying but, when possible, don’t use numbers are letters that can be confused. For example: 0 and O; I and 1; or capital I and lowercase l.

Be sure to avoid using coded SKUs that would require someone to look up a SKU in a log book. For example, a t-shirt should have a SKU such as “T-M-Blk-XL” instead of “046-Blk-XL”

Examples of properly named SKUs

Daily Planners

  • 2018 Daily Planner, Red with Color-Coded Tabs = DP18-Rd-T
  • 2018 Daily Planner, Black with Color-Coded Tabs = DP18-Bk-T
  • 2018 Daily Planner, Blue (no tabs) = DP18-Blu

Tea

  • Tin of Loose Leaf Green Tea, 10 oz = TLL-Grn-10
  • Tin of Loose Leaf Earl Grey Tea, 15 oz = TLL-Earl-15
  • Tin of Earl Grey Tea, 30 Tea Bags = TB-Earl-30

Plates

  • 10-inch Dinner Plates, White, Set of 6 = DPLT10-Wh-6
  • 8-inch Dinner Plates, Blue, Set of 10 = DPLT8-Bl-10

T-Shirts

  • Men’s T-Shirt, White, Medium = TS-M-Wh-Md
  • Women’s T-Shirt, White, Small = TS-F-Wh-Sm

How many SKUs should you have?

There is no right or wrong answer for this but, to put it simply, you should have as many SKUs as necessary to create a highly efficient inventory management process.

As long as SKUs are names properly and utilize important variables, there is no such thing as too many SKUs.

On the other hand, if you don’t have enough SKUs to properly indicate all the variables of products in your inventory, then it’s safe to say you do not have enough SKUs.

SKU naming for your business

Ultimately, the best SKU naming system is the one that works for your business. Opt for simplicity and ease when naming SKUs.

Once your SKUs are set up, inventory management will be easier for everyone involved.

Level up your fulfillment strategy

Subscribe to the ShipMonk Content Hub

By submitting this form, you agree to our Terms & Privacy Policy

Ready to take your ecommerce business to new heights?

Outsourcing your order fulfillment has never been so easy. ShipMonk integrates with your sales channels so you can “Stress Less, Grow More.” Unlock scalable growth today!

Related Posts

Learn more about ShipMonk’s ecommerce fulfillment

Hello there! Its Tom Hanks, bringing you a delightful blend of charm and sophistication as we explore the wonders of ShipMonks exceptional 3PL Ecommerce Fulfillment Platform Tour. Imagine this: youre comfortably seated, perhaps with a lovely cup of coffee, gazing at your laptop screen adorned with vibrant graphs and intriguing maps. Behind this digital tableau? Splashes of green cubes that offer both a simple elegance and an energetic backdrop. Now, picture yourself diving into the sparkling world of bonded Section 321 logistics—an area where efficiency isnt just suggested; its actually celebrated! This tour is your golden ticket to understanding how ShipMonk transforms complex logistical challenges into seamless solutions for businesses looking to thrive. So come along on this journey with us—adventure awaits at every click on ShipMonk.com!. via ShipMonk.com
Picture this: A dedicated ShipMonk employee, donned in a trusty cap and bright safety vest, typing diligently on their ever-reliable laptop. Behind them, a majestic cargo ship glides across the water, a testament to global commerce and adventure. Now imagine youre tapping into the potential to save big on import duties and taxes with Section 321 fulfillment through our third-party logistics services at ShipMonk.com. Its not just about efficiency—its about steering your business towards smoother sailing and more prosperous horizons. Ahoy, savings!. via ShipMonk.com
Hey there, friends! Imagine this: youre donning a virtual reality headset and stepping into the mesmerizing realm of efficient fulfillment. Right before your eyes is an impressive warehouse filled to the brim with shelves and boxes, ready to whisk orders right to customers doorsteps like magic. This isnt just any ordinary operation—this is the ShipMonk 3PL Fulfillment Center Tour in immersive 3D VR 360°! Now, picture yourself in this vast expanse teeming with organization and precision—its not just logistics; its a revolution in e-commerce fulfillment! With ShipMonks cutting-edge virtual tour, youll feel as though youre standing alongside their busy team, who ensure that each package finds its way home seamlessly. Isnt it wonderful how technology can bring us closer while making our lives simpler? So put on those headsets and see for yourself how ShipMonk.com is changing the game. Trust me; its something you wont want to miss!. via ShipMonk.com