Many sellers find Amazon SKUs to be confusing and complicated. We wanted to try and take some of the mystery out of the subject and provide some clarity to those looking for information. This month we’ve taken many of the questions our users ask us about Amazon SKUs and answered them in this handy Q&A.
What are Amazon SKUs?
SKU is a general industry term that stands for Stock Keeping Unit. The term was initially developed in the warehousing industry for inventory management and was used to define a distinct item for sale, such as a product.
In the case of Amazon the Amazon SKU is a unique code that refers to a distinct item you are selling in your online shop.
What defines whether something is a distinct product and has its own SKU?
The attributes of an item help to distinguish it from the other items in your catalogue. If an item can be distinguished from other items in some way then it will have a separate SKU.
Who creates Amazon SKUs?
SKUs are essential in Amazon – a product can’t exist in Amazon without one. If you don’t provide a SKU for your product, Amazon will create one for you.
Do I need to create my own Amazon SKUs or let Amazon do it for me?
There are a couple of downsides to Amazon creating SKUs for you and many more upsides surrounding creating your own.
Downsides to using Amazon SKUs:
- The format of the SKU will essentially be meaningless to you. This means you will have no understanding about the product by looking at the SKU you have given it. This isn’t an issue to anyone other than you and those working within your company, however could mean you are missing out on the benefits to creating your own
- If you are running two stores on Amazon, and are selling the same product on both of them, Amazon will allocate a different SKU to each. This means your T-shirt could have a SKU of xxxxx on one store and a SKU of YYYY on the other store. This can make it hard to keep track of products and inventory.
Upsides to creating your own SKUs
- You can quickly identify product groups that are performing well
- You can standardise your product references across your platforms giving you a comprehensive overview of your products and sales across the business.
- You can standardise sales reporting giving you greater visibility
- You can identify warehouse locations of products quickly reducing pick and pack speeds
- You can quickly and precisely describe a product within your own business.
What Amazon SKU format is it best to use?
Ultimately you want to choose a SKU form that enables you to quickly gain information about your products and sales, to pick orders rapidly, and to manage your inventory effectively.
Retailers often create a SKU format that is made up of information about:
- The source/supplier of the products – Perhaps consider using two letters that identify your supplier e.g. HA for Halford Aquatic Wholesale
- A broad descriptor – It may help to identify the type or broad group that your products belong to e.g. TA for Fish Tanks, PU for pumps.
- A Seasonal Identifier – If you sell products with seasonality, you may choose to identify products for a given season/year within the SKU. This can help you identify which products you want to include in end of season sales etc. e.g. SU – to indicate that a Garden Chair is a summer season product.
- condition identifier – Use a component of your SKU to indicate
- cost identifier
- warehouse location.
You can use additional characters in your SKUs and these can be useful in separating parts of a composite SKU. You could therefore use a SKU system that is built up of multiple parts and ends up looking something like this:
where HA is the Supplier, PU reflects that the item is a pump, NO reflects that it is non-seasonal, 13331 is the unique product number, and A1 is the shelving location in your warehouse.
Is there such a thing as good practice for Amazon SKU creation?
Yes. There are some general do’s and don’t’s surrounding how you create your own SKUs. Sticking within these suggested guidelines may help you to create a SKU system that will work for you in the years to come and won’t trip you up.
Some good practice surrounding SKUs you create yourself:
- Don’t use the same SKU for more than one product or variant of product.
- Try to use the same SKU to refer to a product in all your stores on all your channels unless you have a good reason not to.
- Stick to your SKU format. Once you have created a standard format for your SKUs, make sure all your SKUs conform to it. If you don’t need one of the components in your composite SKU, use a placeholder. E.g. Your SKU format has a place to indicate the season it is sold in (SU / WI) but the product you are creating has no seasonal limits. Use a placeholder in the SKU (for example NO) to keep your SKUs consistent.
- Write down the rules of SKU creation and make sure everyone follows them.
How does Expandly handle SKUs?
Expandly Multichannel Management Software gives you the capability to properly manage your SKUs from the point where you set up your Expandly account, through to the day to day running of it.
When you first set Expandly up you can import all your existing products from your sales channel(s) so you can manage your products and listings centrally going forward. Expandly provides the capability to merge products and listings from multiple channels together as you import them. This includes SKU information. For more information on how the Expandly Merge works: Expandly Product and Listing Merging.
Once you are using Expandly for multi-channel product and listing management, you can centrally create a product, including its SKU in Expandly then push these products directly to each of your sales channel(s). This helps you to keep your SKUs consistent across all your sales channel(s).