Automated SKU Numbers: Why Clean Data is Essential to Start the Year
We've all heard the sayings "New Year, New You," and "Clean Space, Clear Mind," probably to the point of ad nauseam. As generic as these expressions are, there's truth and power behind them.
As an e-commerce business owner, you face many challenges. If the foundation of your business isn’t built to withstand them, you’ll never be able to unplug or take that break you deserve. So, as we enter a new year, let’s clean up and level up - starting with your SKU numbers. (And if you’re asking, what does SKU mean? You’ll want to keep reading!)
Cleaning and Organizing Your Data
Let’s kick off the year and your organizational systems the right way. Think of all the different tools you use for your e-commerce business. You’re probably juggling:
Sales channels (Etsy, Shopify, Amazon, Faire)
Accounting (Quickbooks, Freshbooks)
Project management systems (Asana, ClickUp)
Automated emails (Klaviyo, MailChimp)
CRMs
Shipping platforms
Order production and inventory management (DEAR, Fiddle)
And more!
The right tools will help your logistics run smoothly while maximizing customer satisfaction and revenues. However, without system organizations in place, things can get messy quickly, and your reporting, accounting, and onboarding of new inventory management software will be a headache you don't need or have time for. The tools are good, but only as good as the data you provide them.
With a strategic internal system for product SKU numbers, you’ll ensure all these various platforms are in sync and communicating accurately with one another. I’ve been through this process more than a few times with different clients at different stages of their data maintenance. The ones with clean data already in place had a much smoother and painless onboarding and implementation process.
Before we review how to implement best practices for SKUs, let’s start with the basics. What does SKU mean?
What Is a SKU Number?
A SKU, or Stock Keeping Unit, is typically an eight-digit alphanumeric item number assigned to organize, identify, and keep track of inventory. If a product has different colors or sizes, the variations will have unique SKU numbers.
A proper SKU system empowers you to:
Organize and keep track of inventory
Read the most important product characteristics
Manage inventory shipments
Pull sales reports by item across various platforms
Evaluate performance of particular product lines
Check-in and manage inventory shipments
Determine restock order points for raw materials
Build bill of materials by product
Pull a restock order report for specific departments and stores
SKU Numbers vs. UPC Codes
You may have heard the terms “SKU numbers” and “UPC codes” used interchangeably, which can be confusing. They’re similar yet serve different purposes.
A UPC, or universal product code, is a 12-digit code attached to products. UPCs are for universal, external use, and SKUs are for internal use, meaning your internal product SKU numbers are in addition to the required GS1 UPC barcodes. A product will have the same UPC no matter where it’s sold, but strategic SKU numbers will keep you aligned internally based on retailer, product line, raw materials, packaging components and finished goods.
How To Create SKU Numbers Effectively
When it comes to effective e-commerce systems organization, clean product names, clear descriptions, and easy-to-follow product SKU numbers are imperative. Let your systems work for you, not the other way around. Here are a few tips to consider:
Do’s
Make your SKU system easy to follow
Keep SKU numbers short
Determine key product characteristics to track (size, color)
Maintain consistency across product types
Separate what inventory you need to manage - raw materials, components, and finished goods
Don’ts
Don't use spaces, accents, or symbols
Avoid letters that look like numbers (never to use the letter 'O' because it’s easily mistaken for the number ‘0’)
Leave out slashes (programs like excel may try to format your SKU numbers into a date instead)
Though these details may sound insignificant, they’ll help you immensely, especially when you need to do a SKU number lookup across multiple systems. When done correctly, your staff and employees will easily find products, keep inventory organized, and add new SKUs to the mix as you continue to introduce more products.
The Benefits of Automated SKU Numbers Management
Proper SKU management is critical to your business. With clean data, you can more easily implement e-commerce software to help manage your inventory. The built-in analytics and automations help create more effective sales and marketing strategies and more efficient purchasing processes.
A clean and organized product SKU number system helps you optimize your inventory levels to increase revenue and decrease dead stock. It also allows you to analyze the carrying costs of each product to confirm your inventory is meeting your business's financial goals.
With a clear SKU number system, anyone on your team will be able to easily identify products correctly and quickly for faster fulfillment.
Can Automating SKU Numbers be Done in a Day?
Automating your SKU numbers is life-changing for you and your business. With organized product SKU numbers, you’ll be able to better:
Evaluate product trends
Project sales trends
Identify opportunities
Streamline your systems organization
Place accurate orders for raw materials
Pull big-picture business reports across channels or retailers
The less manual work you need to do, the more time you can spend focusing on other areas of your business or your life! (Remember that goal to work from anywhere? This is how you make it happen!)
So, can automating your SKU numbers really be done in a day? The short answer is YES!!! Plus a bit of time for prep work.
If automation and systems aren’t for you, I’ll have it Done-in-a-Day, so you can carry on doing what you do best - being a boss SH-E-O. Knowing what SKU means is only the first part. As your virtual sidekick, I’ll help streamline your onboarding, marketing, logistics, and overall operations, including automating your SKU numbers.
With my systems organization, you’ll get a master template of final SKUs for packaging components, raw materials, and finished goods that are easy to understand, maintain, and scale. I’ll also go in up to three platforms of your choice and do a virtual organization for you.
Are you ready to kick off the year with a clear mind and clean data? So am I!
Download my pricing guide and book a discovery call to get started.