Why you should implement SKUs in your e-commerce

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SKU’s, or Stock Keeping Units, are alphanumeric codes that allow an e-commerce to identify and localize every product in its catalog. It makes rapid follow ups of every article possible, from production until sale and shipping to the final client. The difference between this and other identification codes, like the EAN, is that each e-commerce designs its own based off the criteria it believes would be most appropriate and adherers to the size of the catalog. To begin using SKUs, we recommend you first perform an optimization of your catalog (you can use the analysis of the catalog of your competition as an example). After this, design your SKU architecture and begin to reap the benefits of your e-commerce. This will be explained in detail. 

Benefits of employing SKU codes in the management of e-commerce 

The advantages of being able to count on a system of SKU codes are: 

  • Optimization of follows up on inventory: condition, volume, need for restocking, etc. This helps brands to anticipate demand peaks and accelerate decision making. 
  • Identification of lead time: SKUs allow for measuring the speed that articles from the catalog are sold in order to determine what is most and least sold.
  • Improvement of client satisfaction: avoid possible supply shortages and user order cancelations.
  • Quality data collection about buyer behavior
  • Reestablish clientele attention: the departments of clientele attention will be able to respond to user inquiries in real time by having access to the current and updated facts of the inventory. 

In general, there is an increase in productivity of the business when less time has to be dedicated to the management of the warehouse, the stock, and the inventory of products. 


How to design SKU codes for an e-commerce 

Before throwing yourself into creating codes, you should design your SKU architecture: the roadmap which will guide all of this digital process and transformation. In this architecture, it should be explained what information should be coded with what number and letter. This opens up the possibility of generating new codes whenever new products are added to the catalog. 

Every code should contain references to all the types of products, their physical characteristics, their functionality, or the inclusion of the type of audience it will be geared toward. A few of the criteria will depend on the goals of the e-commerce and the volume of the catalog. At the same time, given the objective of SKUs is to facilitate the localization of individual products, you should avoid always duplicating the same codes within the catalog. In fact, it is recommended you do not recycle SKUs from archived articles since, if the data base has not been debugged well, it can create identification problems leading to error messages and client dissatisfaction.

Once implemented, this system of alphanumeric codes will be enough for business operators to introduce numbers and letters that correspond with the data base to access all the information about a selected article. 

On the more advanced level, SKU codes can include information about the cost of the sale of every single product. In this way, you can revisit your strategy of pricing at a glance and speed up decision making to anticipate the movements of your competition.  The combination of a Stock Keeping Unit with a competitor monitoring software will be the key to offering attractive, competitive prices to your user and maximize benefits. 

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Angela de la Vieja
Content Manager
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