SKU (Stock Keeping Unit)
A SKU (Stock Keeping Unit) is a seller's internal code for a distinct product variant, used to track inventory and fulfill orders. Unlike a GTIN, which is globally unique, a SKU is defined by each company, so the same item can have different SKUs at the buyer and the supplier. Mapping between them is essential.
SKU versus GTIN
A SKU is internal and seller-defined; a GTIN is global and standardized. A retailer's SKU, a distributor's SKU, and the manufacturer's GTIN can all point to the same physical item, which is why orders need a cross-reference to match lines correctly across partners.
SKUs in order matching
When an order arrives with the buyer's part number, the supplier's system has to map it to its own SKU. A missing or wrong mapping fails the line and stalls the order. Maintaining a customer-item cross-reference is what makes automated order matching work.
SKU vs UPC vs GTIN
A SKU is one company's internal code. UPCs and other GTINs are global identifiers issued through GS1.
| Code | Who assigns it | Unique across | Format |
|---|---|---|---|
| SKU | Each seller | One company | Letters and numbers, any length |
| UPC (GTIN-12) | Brand owner, via a GS1 company prefix | The world | 12 digits, e.g. 012345678905 |
| EAN (GTIN-13) | Brand owner, via a GS1 company prefix | The world | 13 digits |
| GTIN-14 | Brand owner, via a GS1 company prefix | The world | 14 digits for cases and pallets |
How to build a SKU
A good SKU is readable at a glance. A common pattern strings together category, product, and variant, such as OLV-EVOO-500-12 for extra virgin olive oil, 500 ml, case of 12.
- Start with letters, not a zero. Spreadsheets strip leading zeros.
- Avoid characters that look alike, such as O and 0 or I and 1.
- Keep it short enough to read aloud and key in, around 8 to 12 characters.
- Do not encode price or supplier. Both change and the SKU should not.
- Never reuse a discontinued SKU for a different product.
SKU cross-reference example
Each customer may order the same item by its own part number. The cross-reference ties them together so an incoming PO line maps to the right SKU and unit of measure.
| Customer part number | Supplier SKU | GTIN | UOM |
|---|---|---|---|
| KR-448120 | OLV-EVOO-500-12 | 10012345678902 | CS |
| WF-00917 | OLV-EVOO-500-12 | 10012345678902 | CS |
| Supplier catalog | OLV-EVOO-500-EA | 00012345678905 | EA |
Related Terms
Related Resources
Frequently Asked Questions
SKU stands for Stock Keeping Unit, a company's internal code for a distinct product or variant used to track inventory and fulfill orders.
A SKU is an internal, company-specific code. A UPC is a globally unique barcode number, a form of GTIN. The same item has one UPC but can have different SKUs at each company.
Most businesses use 8 to 12 characters. Long enough to encode category and variant, short enough to read and type without mistakes.
Usually. Many ERPs call the SKU the item number or part number. What matters is that it is unique within your company.
How to Answer "Are You EDI Capable?"
A buyer asked, and you need to answer this week. The four things they are checking, what you can say yes to today, and a realistic date for the rest.
- What a buyer is really asking when they ask this
- The minimum set-up that makes the answer yes
- What you can answer today versus what needs building
- Rough timelines, so you can give a date rather than a maybe
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