What are SKUs used for?
SKUs are an important tool, not just for manufacturers but for retailers too. But, for manufacturers, it’s more important to have them set up since you’ll need to track the following:
So, what exactly are SKUs used for?
1. Inventory management
SKUs help you categorize, organize, and track your inventory levels, regardless of whether you manage your inventory in Excel or with manufacturing ERP software.
Without SKUs, all of your inventory management efforts will be guesswork.
Once you have your SKUs set up in your business, you can determine the best levels of stock to keep for all your items from gathering information such as sales history, which will save you time and money down the line.
2. Product recommendations
Using and defining SKUs will help your e-commerce store page make better suggestions for customers when they’re shopping because it’ll be able to determine the similarity between products.
So, let’s say you have a customer on your website looking at clothes made with 100% cotton. The unique SKUs on products and variants mean your store can make suggestions to customers by matching similarities within the SKU.
We briefly touched on this, but SKUs on your products are going to help you collect invaluable data for sales and manufacturing analytics, allowing you to analyze:
This information enables you to eliminate dead stock, prioritize products, and better plan production cycles.
Ultimately, how you use SKUs depends on your business’ specific needs. However, you’ll need to use them, as they’re necessary for inventory management and analysis in your warehouse, manufacturing, and storefronts. SKUs will help you establish a common language for you and your staff, so there can be no confusion over your item’s variants.