How to Create a SKU: Examples for Ecommerce and Retail Brands

As your product catalog grows, keeping inventory organized becomes increasingly important. Whether you're selling apparel, camping equipment, or retail merchandise, each product and its variations need to be easily identifiable.

That's where Stock Keeping Units (SKUs) come in. Creating a consistent SKU numbering system can make inventory tracking, order fulfillment, and product management easier.

Here's how to create SKU numbers in five steps, with practical examples for ecommerce and retail businesses.

What Is a SKU?

A Stock Keeping Unit (SKU) is a unique code that a business assigns to a product or product variant for internal inventory tracking.

SKUs typically contain letters, numbers, or a combination of both. Businesses create their own SKU formats based on the information they need to track.

For example, a clothing brand might use TSH-101-BLK-M to identify a specific T-shirt style in black, size medium.

If that same shirt comes in a large, it should have a different SKU so inventory can be tracked separately.

How to Create SKU Numbers in 5 Steps

To create a SKU, identify your product's important attributes, choose a consistent numbering format, assign a unique code to each product variant, and test the system before using it across your inventory.

1. Identify Your Product Attributes

Start by determining which details distinguish one product from another.

Common attributes include product category, style, model, color, size, and material.

An apparel brand may prioritize color and size, while a camping equipment company may need to distinguish products by capacity or model.

Choose attributes that help identify each product and won't change frequently.

2. Choose a Consistent SKU Format

Next, decide how those attributes will appear in your SKU.

One simple SKU format is:

Category – Style – Color – Size

For example:
TSH-101-BLK-M

This represents:

• TSH = T-shirt
• 101 = Style number
• BLK = Black
• M = Medium

You don't have to use this exact format. What's important is using the same structure consistently throughout your product catalog.

3. Keep Your SKU Codes Short and Clear

Use straightforward abbreviations and avoid making SKUs unnecessarily complicated.

If BLK represents black, use that abbreviation consistently rather than switching between BLK, BK, and BLACK.

It's also helpful to avoid confusing characters, such as the letter O and number 0, or the letter I and number 1.

Check the formatting and character limits supported by your ecommerce and inventory management systems.

4. Assign a Unique SKU to Each Product Variant

Every distinct inventory item should have its own SKU.

For example, a black T-shirt in medium and a black T-shirt in large should not share the same identifier.

If the same product is stored in multiple warehouses or sold across multiple channels, use a consistent SKU to identify that product while tracking inventory quantities separately.

This helps prevent confusion between products, locations, and sales channels.

5. Test and Document Your SKU System

Before applying your new format across your entire catalog, test it with a small selection of products.

Make sure each SKU is unique, easy to understand, and compatible with your ecommerce platform, inventory management software, and fulfillment provider.

Document your naming conventions so employees can follow the same rules when adding new products.

SKU Number Examples for Different Products

Here's how a simple SKU numbering system might work across several product categories.

These are illustrative SKU examples, not standardized industry codes. Your SKU structure should reflect your products and inventory needs.

Common SKU Mistakes to Avoid

A SKU system is only useful when it's applied consistently.

Common mistakes include:

• Duplicate SKUs: Assigning the same identifier to different products or variants.
• Inconsistent formatting: Using different abbreviations or attribute orders for similar items.
• Overly complicated codes: Including too much information, making SKUs difficult to read.
• Reusing discontinued SKUs: Creating confusion between historical inventory records and new products.
• Using changing information: Including prices or other details that may become outdated.

Before changing an existing SKU system, consider how those changes may affect inventory records, sales channels, and fulfillment integrations.

Is a SKU the Same as a UPC?

No. A SKU is an internal identifier created by a business to track its inventory.

A Universal Product Code (UPC) is a standardized product identifier commonly represented by a barcode in retail systems.

The same product may have different SKUs at different businesses while retaining the same UPC.

Why Do SKU Numbers Matter for Warehouse Fulfillment?

An organized SKU system helps warehouses identify the correct products during receiving, storage, picking, and packing.

When product identifiers match across a brand's sales platforms and fulfillment systems, it's easier to track inventory quantities, locate products, and process orders accurately.

For businesses working with a third-party logistics (3PL) provider, consistent SKU information also helps reduce confusion when inventory arrives or new products are introduced.

At Fast Fulfillment, we provide warehousing, inventory management, and order fulfillment services for growing ecommerce and retail brands.