SKU (Stock Keeping Unit)
A SKU (Stock Keeping Unit) is the alphanumeric code a single seller assigns internally to track one specific, sellable variant of a product — a given size, color, material, and pack count — through its own inventory, warehouse, and order systems. Unlike a UPC or GTIN, a SKU is not standardized, licensed, or shared: the same physical item gets a different SKU at every retailer or distributor that stocks it, because each one builds the code to fit its own catalog and warehouse structure. Most sellers encode meaning into the string itself (brand, category, size), which barcoded identifiers like UPC and GTIN deliberately avoid.
What a SKU actually identifies
A SKU is scoped to one sellable variant, not one product. A wrench sold in three handle lengths and two finishes is one product with up to six SKUs — one per length-and-finish combination a customer can actually order. Add a new pack size and you add a new SKU, even though nothing about the underlying item changed.
That granularity is the point. Inventory counts, reorder points, warehouse bin locations, and pricing all live at the SKU level because that's the level a warehouse actually picks and ships at. A count of "how many wrenches do we have" is meaningless without knowing which length and finish; a SKU-level count answers it directly.
SKU vs UPC vs GTIN vs MPN
These get confused constantly because they can all sit in the same product record, but they answer different questions.
| Identifier | Who assigns it | Unique across | Format |
|---|---|---|---|
| SKU | The seller (retailer or distributor) | That one seller's own catalog | No fixed format — seller-defined |
| UPC / GTIN | The brand owner, from a licensed GS1 prefix | Every seller, worldwide | Fixed-length numeric (12 or 13 digits) |
| MPN | The manufacturer | That manufacturer's own line | No fixed format — manufacturer-defined |
A single physical item carries one GTIN wherever it's sold, one MPN from its manufacturer, and a different SKU at every retailer or distributor that stocks it — because the GTIN and MPN identify the product, while the SKU identifies this seller's record of it.
How to structure a SKU well
There's no standards body to satisfy, which is exactly why bad SKU schemes are common. A few practices hold up at scale:
- Encode stable attributes, not volatile ones. Brand, category, and size rarely change; price and supplier do. Baking a price into a SKU string means re-issuing the SKU every time a cost changes.
- Never reuse a retired SKU. A discontinued item's SKU should stay retired, not get reassigned to an unrelated replacement — historical sales, return, and warranty records are keyed to it.
- Avoid characters that break downstream systems. Slashes, ampersands, and leading zeros a spreadsheet silently strips have all caused real reconciliation failures between a PIM, an ERP, and a marketplace feed.
- Keep it machine-friendly, not just human-friendly. A SKU that's readable at a glance is nice; a SKU that parses reliably in every system that touches it is required.
Where SKUs live in catalog operations
The SKU is usually the primary key of the item master: the field everything else — attributes, pricing, images, inventory levels — hangs off of. During new item setup it's typically the first field assigned, often before a UPC or MPN cross-reference is even confirmed.
Because a SKU has no meaning outside its issuing seller, matching your SKU to a supplier's MPN or a marketplace's GTIN requirement is a mapping problem, not a lookup — it's the same cross-reference challenge that shows up whenever a distributor's parent-child variant structure needs to line up with a manufacturer's own part numbering.
Frequently asked questions
What is the difference between a SKU and a UPC?
A SKU is assigned by the individual seller for its own inventory tracking and has no fixed format; the same item gets a different SKU at every retailer that stocks it. A UPC is a standardized, GS1-licensed barcode number assigned once by the brand owner and used identically by every seller of that item worldwide.
Who assigns a SKU?
The seller — the retailer, distributor, or manufacturer managing that specific inventory record. There is no central registry or licensing body for SKUs, unlike UPC/GTIN, which are issued through GS1.
Can two different products share the same SKU?
No. A SKU must be unique within the issuing seller's own catalog. If it isn't, inventory counts, order routing, and returns processing all become ambiguous for any item using that code.
Does a SKU need to follow a standard format?
No. Unlike UPC, GTIN, or EAN, there is no external standard governing SKU structure. Each seller defines its own convention, commonly encoding brand, category, and variant attributes into the string for internal readability.
Should a discontinued product's SKU be reused for its replacement?
No. Best practice is to retire a SKU permanently once its item is discontinued rather than reassign it. Historical sales, returns, and warranty records stay tied to the original SKU, and reuse breaks that history.