SKU (Stock Keeping Unit)
A SKU or Stock Keeping Unit is a unique identifier assigned to each product in a company's inventory. It is used for tracking and managing stock levels, sales, and inventory turnover. A SKU can be composed of letters, numbers, or a combination of both, and it should be unique to each product.
The importance of SKU lies in its ability to provide valuable information about a product, such as its price, size, color, and other attributes. This information helps in managing inventory levels, forecasting demand, and analyzing sales performance.
SKU management is crucial for any business that deals with physical products. It enables companies to streamline their inventory management processes, reduce costs, and increase efficiency. By assigning a unique SKU to each product, companies can easily track the movement of goods from one location to another, monitor stock levels, and identify slow-moving products.
A well-organized SKU system can also help in optimizing pricing strategies. Companies can use SKU data to analyze sales trends and adjust prices accordingly. For example, if a particular product is selling well, the company can increase its price to maximize profits. Conversely, if a product is not selling, the company can reduce its price to clear out inventory.
In conclusion, SKU is an essential tool for product managers and inventory managers. It provides valuable insights into a company's inventory, sales, and pricing strategies. By implementing an effective SKU system, companies can improve their operations, reduce costs, and increase profitability.