Glossary
What is a SKU?
A stock keeping unit (SKU) is a unique identifier a business assigns to a sellable, usable, or trackable item.
Definition
Example
A coffee roaster sells the same blend in 12oz and 5lb bags. Each weight has its own SKU (BLEND-COL-12OZ and BLEND-COL-5LB) so receiving, sales, and reorder counts stay separate, even though they share a product name.
By Cameron Priest · Co-founder, Order3
Cameron co-founded TradeGecko, the inventory platform acquired by Intuit. He has spent more than a decade building software for the people who run physical stock.
Updated 2026-06-16
Frequently asked questions
What is the difference between a SKU and a barcode?
A SKU is your internal identifier for an item, chosen to match how your catalog is organized. A barcode (UPC or EAN) is a global identifier assigned by a manufacturer or standards body. A SKU can carry a barcode, but the SKU is what your records, reports, and reorder rules run on.
What is SKU sprawl?
SKU sprawl is the slow accumulation of duplicate or near-duplicate SKUs for the same item, usually because new codes get typed in ad hoc. It corrupts every downstream report: inventory value, reorder points, and sales by item. The fix is a written SKU format and one owner for renames and merges.
How do I create a SKU?
Write a consistent format that encodes the attributes you reorder and report on, such as brand-style-size-color. Keep it readable, avoid characters that break spreadsheets, and never reuse a retired code for a different item.
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