If you’ve ever worked retail, you’ve likely come across SKU numbers.
But for those just starting their own brands or working as freelance fashion designers helping their clients build their own brand from scratch, inventory management might be an unfamiliar task to tick off in your long list of to-do’s.
So, in this article, I’ll cover everything you need to know about SKU numbers in the fashion industry – from their meaning and purpose, plus a guide on how to create SKU numbers and some handy tips to manage your SKU number system.
Let’s get started!
Why am I qualified to write about this stuff? In my 15 years of experience in the fashion industry, I’ve journeyed from being an in-house designer, starting my own brand (yep!), to growing my freelance career to $100,000+. Now, with all the knowledge I’ve learned along the way, I want to help fashion designers (and PDs, TDs, etc.) like you make it in the industry.
SKU numbers, short for Stock Keeping Unit numbers, are unique codes assigned to individual products within a fashion brand’s inventory. These codes serve as product identifiers, allowing businesses to efficiently track and manage their merchandise efficiently. Each SKU number corresponds to specific product variations, such as different sizes, colors, styles, or other attributes.
For fashion retailers, SKU numbers are crucial in organizing their diverse product lines. Not only that, but by using SKU numbers, fashion businesses can monitor stock levels, identify popular products, and streamline the overall retail process.
A common misconception is that SKUs and UPCs are interchangeable.
Well, both serve similar purposes but have distinct differences:
In a nutshell – SKU numbers, unique to each business, help efficiently track inventory levels. They can be customized to reflect product details like color or size, which is super handy for fashion brands wanting to organize their internal systems.
In contrast, UPC (Universal Product Code) numbers are standardized identifiers. They ensure universal recognition across businesses and are typically used for selling products at retail points internationally.
To better understand how SKUs and UPCs work, here’s a quick guide:
|SKU (Stock Keeping Unit)||UPC (Universal Product Code)|
|Purpose||Internal inventory management codes||Universal product identification codescanned at the point of sale|
|Customizability||Customizable based on retailer’s needs||Fixed structure of 12 digits|
|Characters||Alphanumeric characters||Numeric characters only|
|Standardization||Not standardized||Internationally standardized|
If you’re still not sure which one to use, many fashion businesses actually use both systems in tandem. They create SKU codes based on their internal product variations and add UPC barcodes when items need to be sold at retail points.
Pro Tip: If clothing is sold in any sort of retail outlet (like Amazon, online shops beyond the brand’s own, or brick-and-mortar shops), UPC codes are required. If the clothing will only be sold on a brand’s own website or direct-to-consumer, UPC codes are not required.
So, depending on your needs, you may need both or just one.
Crafting a reliable SKU system is a balance between creating a code unique enough that there’s absolutely no chance of getting two of the same ones – but not complicated enough to be incomprehensible and difficult to manage to those using them.
Here’s a step-by-step guide including examples:
Details matter when creating SKUs. My advice is to start broad and then narrow down.
Begin with top-level identifiers such as season, year, and product category. For example, “FW2021” for a Fall/Winter 2021 collection.
For the product categories, this could be a simple 2-3 letter abbreviation or number that represents each item in your collection. For example, “DRS” for dresses or “JKT” for jackets.
Next, consider including other distinct details such as size, material, and color information within your SKUs. Also consider any other key details that will help you identify and sort your products quickly in the future. For example, if you have a small red dress from your FW2021 collection, its SKU might read “FW2021-DRS-S-R.”
Pro Tip: As SKU numbers often consist of several numbers and letters combined together, it’s a good practice to separate each section into hyphens.
Include a sequence number to distinguish between individual products within the same subcategory. For example, “DRS-S-R-101” for the first dress in your line, “DRS-S-R-102” for the second one, and so on.
Once you’ve established your systematic SKU numbering system, the last step is to input these unique identifiers into your inventory management software. By doing so, you streamline the tracking and management of your products.
This digital organization not only ensures efficient control of inventory levels but also enables you to quickly identify, restock, and fulfill orders, keeping your clothing business running smoothly and effectively.
Pro Tip: There is no one size fits all solution for creating SKU numbers. The beauty of using SKU numbers is their flexibility, so use it to your advantage. Recognize which details are important for you to include in the SKU number codes and implement them. For example, if the season and year doesn’t matter as much to you, then leave it out.
Here are some more tips to make sure you’re creating SKU numbers efficiently:
1. Keep it simple: Don’t overcomplicate your SKUs with unnecessary details or codes that even you will have a hard time deciphering. Remember, these are meant to be used by humans (you and your team!) in everyday operations.
2. Stay consistent: Maintain consistency across all your SKU numbers – this means sticking to one format once you’ve decided on it. This makes sure there’s no mix-up between different products or variations.
3. Create an SKU Guide: What makes sense to you might just look like a bunch of random letters for another person. Consider making an SKU guide to help other members and newbies understand how your SKU codes work.
4. Use unique identifiers: While it might be tempting to use intuitive letters such as “B” for blue, consider the possibility of future conflicts. As your product range expands, you may introduce items with colors like black, brown, or burgundy, all sharing the same initial letter. To avoid confusion down the line, use unique and distinctive codes, ensuring that each attribute, be it color or size, has an exclusive identifier even as your business and product line grows.
Pro Tip: I always created a 3-digit code for colors and silhouettes for my freelance clients. I would build out a master list and every time we created a new color or silhouette, we’d add a new code to it. For example, burgundy would be BUR and burnt orange would be BUO (not BUR). And skirt would be SKT and skort would be SKO. This ensured we weren’t duplicating codes, which can create massive confusion.
5. Try to keep it short: I know, I know, it’s not easy when there are so many details to take note of. Just make sure to keep it as short as possible and only have the details you need. Longer ones increase the chances of errors while inputting and also make it harder to remember the SKU codes.
At the end of the day, the right length depends on how much variety exists within your inventory.
A dependable SKU system is more than just a series of codes; it’s a strategic asset. It simplifies inventory tracking and management, order processing, and overall organization. Every product in your collection gets a unique identifier, ensuring a seamless operation.
So, when structuring your SKU system, plan for growth. Leave room for new designs and expanding collections. Think of it as setting the stage for your brand’s future.
A well-designed SKU system not only handles your current products efficiently but also accommodates the evolution and expansion of your fashion brand.
Create an SKU number system that grows along with you and your brand!