Every product on your shelves has an identity, and for a retailer that identity is the SKU. It sits behind almost everything you do with stock: counting it, reordering it, finding it, and working out what actually sells. Get your SKUs right and your inventory and sales data make sense. Get them wrong and every report built on top of them is shaky.
| Key takeaways • A SKU (stock keeping unit) is an internal, retailer-assigned code used to track a product or variant through inventory and sales. • A SKU is yours and unique to your business. A UPC is a global, GS1-issued number that is the same across every retailer. • A good SKU is short, meaningful, consistent, and never reused. • A SKU is only as reliable as the system that reads it across your stores. |
What is a SKU number?
A SKU, pronounced “skew,” is a stock keeping unit: an internal, alphanumeric code a retailer assigns to each product or variant to track it through inventory and sales. You create it for your own catalogue, and it is unique to your business, so the same jumper can carry one SKU at your store and a different one at another retailer.
A good SKU is usually built from the product’s attributes. A navy medium t-shirt might be TSH-NVY-M-001, where the first part is the category, the middle captures colour and size, and the last part is a unique sequence. That way a person or a system can read meaning straight from the code, instead of looking it up.
What is the difference between a SKU, a UPC, a barcode and a GTIN?
A SKU is your internal code, a UPC or EAN is a global number shared across all retailers, and a barcode is the scannable image that can carry either one. They do related jobs, but they are not the same thing.
| Term | What it is | Who assigns it | Scope |
| SKU | An internal product or variant code, alphanumeric, usually 8 to 16 characters | The retailer | Unique to your business |
| UPC | A standardised 12-digit numeric code | GS1 (the brand registers it) | Global, same across retailers |
| EAN | The 13-digit international version of the UPC | GS1 | Global (Australia and Europe) |
| GTIN | The GS1 umbrella term (8, 12, 13 or 14 digits) that UPC and EAN sit under | GS1 / the brand owner | Global |
| Barcode | The scannable image of lines on the label | n/a | Encodes a UPC/EAN or a SKU |
The simplest way to hold it in your head: a UPC or EAN identifies a product everywhere, a SKU identifies it inside your business, and a barcode is just the scannable picture that carries one of those numbers. You do not control UPCs. You do control your SKUs, which is exactly why they are so useful for tracking.
What makes a good SKU?
A good SKU is short, meaningful, consistent and unique. Because you create them yourself, SKUs are only as good as the rules you set, so a few practices make the difference.
- Keep them short. Shopify recommends a maximum of around 16 characters.
- Make them meaningful. Build the code from attributes like category, style, colour and size, so it can be read at a glance.
- Use one consistent format across the whole catalogue, with the same abbreviations every time.
- Avoid leading zeros. Some software drops them, and staff can mistake a zero for the letter O.
- Avoid spaces and special characters like !, @ or &, which can break some systems.
- Keep every SKU unique, and never reuse a retired code, or old data will resurface against new products.
- Do not just reuse the supplier’s code or the UPC as your SKU. Keep your internal code separate from the global one, so each does its own job.
How do retailers use SKUs to track inventory?
Retailers use SKUs to see how much of each product they hold, set reorder points, locate stock, and count it accurately. Each SKU turns a pile of product into a number you can manage.
With clean, consistent SKUs you can trigger replenishment before you run out, find stock by shelf, store or warehouse, and count it reliably during stocktakes. SKUs also help you spot shrinkage, because a code that keeps coming up short is a signal worth investigating. Without them, inventory is a guess.
How do SKUs help track sales?
Because every sale is recorded against a SKU, retailers can see how each product and variant sells, identify their best and worst performers, and measure margin at the SKU level rather than just overall.
That is what lets you buy more of what works, clear what does not, and plan ranges with evidence instead of instinct. The SKU connects the two sides of the business that matter most: what you hold, and what moves.
Why do SKUs break down across multiple stores?
A SKU only tells you what a product is, not where every unit of it sits, so across multiple stores it is only as reliable as the system reading it. If each store or channel uses slightly different SKUs for the same product, or updates stock on its own schedule, the SKU stops being a single source of truth and becomes several competing ones.
This is how inaccuracy creeps in. Research by ECR Retail Loss found that more than 60% of inventory records contain inaccuracies, and Zebra found that 84% of retail decision-makers see maintaining real-time stock visibility as a challenge. The SKUs may be fine. The system joining them up is where it falls apart.
How to make SKUs work across the whole business
A SKU reaches its full value only when every store, channel and system reads it the same way, in real time. That is less about the code itself and more about the platform behind it.
Krisp Systems is a unified POS and OMS platform that gives retailers one accurate view of every SKU across all their stores. It connects POS, orders, inventory and fulfilment into one operational view, so a SKU means the same thing everywhere and shows one accurate count of stock. The SKU tells you what the product is. A connected system tells you, reliably, where every unit of it is and how it is selling.
Frequently asked questions
What does SKU stand for?
SKU stands for stock keeping unit. It is an internal, alphanumeric code a retailer assigns to a product or variant to track it through inventory and sales.
What is the difference between a SKU and a UPC?
A SKU is an internal code you create and control, unique to your business. A UPC is a standardised 12-digit number issued through GS1 that identifies a product globally, the same across every retailer. A SKU is yours; a UPC is universal.
Is a SKU the same as a barcode?
No. A barcode is the scannable image on a label, and it can encode a UPC, an EAN, or your internal SKU. The SKU is the code; the barcode is one way of presenting it.
How many characters should a SKU be?
A SKU should be as short as is practical while staying meaningful. Shopify recommends a maximum of around 16 characters, enough to capture the key attributes without becoming hard to read.
Do SKUs have to be numbers?
No. SKUs are alphanumeric, so they can mix letters and numbers. Letters are useful for making the code meaningful, such as NVY for navy or M for medium.
Can two products have the same SKU?
No. Each product and variant should have its own unique SKU. Duplicate SKUs lead to miscounts and errors, which is why retired codes should never be reused.
Do you need both a SKU and a barcode?
Most retailers use both, because they do different jobs. The SKU is your internal tracking code, and the barcode is the scannable image used at the checkout, often encoding the product’s UPC or EAN.
Why do SKUs matter for multi-store retailers?
Because a SKU is only useful if every store and channel reads it the same way in real time. Without a connected system, the same product can end up with inconsistent SKUs or stock counts, and the data stops being reliable.
Want your SKUs to give one accurate view of stock and sales across every store? Talk to the Krisp Systems team about connecting POS, inventory, orders, and fulfilment into one operational view.
