An SKU, or Stock Keeping Unit, is a unique internal code used by a business to identify and track a specific product or product variant. SKUs help companies manage inventory by distinguishing differences such as size, colour, model, packaging, supplier, or warehouse location. In warehousing and ecommerce, SKUs are used for stock counts, picking, replenishment, sales reporting, order fulfilment, and inventory control. Unlike a UPC or barcode, an SKU is usually created and managed internally by the business.
SKU in Logistics
- Each variation of a product (size, color, configuration) has a separate SKU
- 3PL warehouses receive, store, and ship goods at the SKU level
- Incorrect SKU management causes picking errors and order fulfillment mistakes
- Barcode labels often encode the SKU for scanner-based warehouse operations
SKU proliferation (too many product variants) can significantly increase warehousing complexity and fulfillment costs. Regularly review SKU counts and eliminate slow-moving variants.
Related terms: Warehousing Services, B2B Fulfillment, WMS (Warehouse Management System), Ecommerce Fulfillment.
