SKUs are a very useful tool for retailers. Let’s take a look at why many merchants choose to use SKUs.
Improved Inventory Management
Each SKU represents a specific product or item in your inventory. This unique identification allows precise tracking of individual products. SKUs thus help maintain accurate and up-to-date inventory levels. By assigning a unique SKU to each item, you can quickly and easily record changes in inventory levels as products are received, sold, returned or exchanged. For these reasons, SKUs reduce the risk of confusion or mismanagement.
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SKUs provide a systematic way to track and manage inventory. They help keep accurate records of the quantity, location and status of each product, reducing the risk of overstocks or stockouts. This allows you to group similar products with shared attributes (e.g. size, color, style, condition) under a common SKU category.
SKUs thus make it possible to organize products efficiently. They make it easier to locate specific items in your warehouse or store. This results in faster order fulfillment and a reduction in the time needed to find a product.
With SKUs, you can also easily monitor stock levels of each product and order from suppliers at the right time to maintain optimal inventory levels and reduce storage costs. This minimizes the risk of running out of popular items or having too many.
Better Management of Variations and Life Cycles.
SKUs are useful for managing variations in product characteristics within the same product line. If a company offers a product in different sizes, colors, or styles, SKUs can incorporate this information, making it easier to track and manage these variations.
SKUs are also used to manage products throughout their life cycle, from their introduction to the discontinuation. This is especially useful for tracking slow-moving or seasonal items.
Efficiency in Inventory Rotation
SKU codes can include the date the product was received by the store or the product’s expiration date. When it comes to perishable goods, the classification enabled by SKUs ensures that older inventory is sold before newer items, reducing waste and potential losses.
Faster Fulfillment of Customer Orders
SKUs simplify and speed up order processing and fulfillment. They allow your staff to quickly identify the right products for customer orders. This reduces the chances of the wrong item being shipped to the customer. The fewer errors, the more satisfied customers!
Access to Data Analytics and Report Customization
SKUs provide valuable data. You can track individual product performance, identify the best sellers and evaluate the profitability of each SKU. This information makes pricing, marketing and inventory decisions easier.
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Moreover, SKUs allow you to generate detailed reports specific to each product or product category. It is particularly useful when you have an extensive product catalog with various attributes, as you can analyze data for specific categories, sizes, or styles. So you can evaluate the performance of different product attributes, such as size, color or brand.
These data and reports enable informed decisions regarding product inventory and sourcing.
Fewer Losses and Theft
SKUs can help deter internal and external theft. When inventory is closely monitored using SKUs, discrepancies become more visible, making it easier to discover and prevent loss and theft.
Simplifying Returns and Exchanges
SKUs make return and exchange management of products easier. With SKUs you can quickly identify the product, check its condition and process the return more efficiently.
As your business is growing, SKUs make it easier to manage a wider and more diverse range of products. They provide a scalable system to add new products.
Ease of Communication
When everyone in your organization uses the same SKUs, communication about products and stock levels is simplified. This reduces the risk of misunderstandings and errors.
In short, SKU codes make it easier to track inventory and sales. So, time is saved on inventory, supply and order management.