How to Create SKU Numbers for Your Products

A SKU is a short code you make up for each thing you stock, one code for each version you'd count separately. The easiest scheme that works joins two or three short codes, broadest first: the product's size or type, then its scent, flavor or color. A 9 oz jar candle in plumeria becomes JAR09-PLU, the 4 oz tin of the same scent TIN04-PLU. Keep it under about a dozen characters, in capitals, with dashes and no spaces, never start it with a zero, and never give a retired SKU to something new. That's the whole system; everything below is detail, examples, and a free builder that makes them by formula.

The short version

1. One SKU for each thing you'd count separately: each size, each scent, each color.
2. Build it from short codes, broadest first: size or type, then scent, flavor or color.
3. Capitals, numbers and dashes only. No spaces, no zero at the start, numbers only where the part is a number.
4. Don't put anything in it that changes: price, supplier, the year.
5. Give what you buy its own SKUs too, with a prefix: RM- for raw materials, PK- for packaging.
6. Never reuse a SKU. A retired product keeps its code, and a new one gets a new code.

What a SKU is, and what it isn't

A SKU, a stock keeping unit, is your own code, for your own stock. Nobody issues it and nobody else has to understand it. That's the difference from a barcode number: a UPC or GTIN on a retail package comes from GS1, is the same code for everyone who scans it, and is a string of digits a person can't read. A product can have both, and most do once they're in shops: the SKU is what you say and type, and the barcode is what the scanner reads. How barcodes work is in GS1 barcodes for small food producers.

A SKU isn't a lot number either. Every jar of plumeria in the 9 oz size has the same SKU forever; the lot number changes with every batch you pour, and ties a jar to the day it was made. How to make those is in how to create lot numbers.

Step 1: list what you'd count separately

A SKU exists to be counted, so the test for a new one is simple: would you want to know how many of these you have, apart from the others? A candle maker with 14 scents in three sizes wants to know how many plumeria tins are left, not only how many candles, so that's 42 SKUs. A different label for the holidays on the same jar? If you'd count them apart, it's a new SKU; if you wouldn't, it isn't.

A case of six isn't a new SKU in most systems. It's the same jar, sold in a bigger unit, and the count is still of jars.

Step 2: build it from short codes, broadest first

Lehua Glow, a made-up candle maker I use in these examples, uses this scheme:

Which gives SKUs like these:

Broadest first means the SKUs sort into a sensible order in any list: all the 9 oz jars together, then the tins. Put the part you'd group by first. A coffee roaster might use origin, then roast, then bag size (ETH-LT-12); a hot sauce maker the sauce, then the bottle (HAB-05); a clothing maker the style, then the color, then the size (TEE-NVY-M).

Step 3: the rules that keep SKUs working

• Capitals, numbers and dashes. No spaces: some systems trim them and some don't, and JAR09 PLU stops matching JAR09-PLU. Skip characters like &, # and / that mean something to spreadsheets and websites.
• Never start with a zero. A spreadsheet reads 0912 as the number 912 and drops the zero.
• Numbers where they belong. O and 0, I and 1 are easy to mix up when someone reads a SKU aloud at a count. Keep digits to the parts that are numbers, like the size in JAR09, so a reader knows which one it is.
• Nothing that changes. A price, a supplier or the year in a SKU is wrong the day it changes, and then the SKU means something it isn't.
• Short. About a dozen characters is plenty, and it fits on a shelf label and a phone screen.
• Never reuse one. When a scent is retired, its SKU stays retired. Reuse it, and last year's sales and this year's get mixed in every report.

Step 4: SKUs for what you buy

Most SKU advice is for what you sell, but a maker counts the wax, the oil and the jars too, and they need codes as much as the candles. A prefix keeps them apart from what you sell: RM- for raw materials, PK- for packaging. The supplier's own code for the same thing is a separate column; don't use it as your SKU, because a second supplier for the same wax will have a different one.

Step 5: put the same SKU everywhere

A SKU is only useful if it's the same in every place: on the shelf label, in the spreadsheet, on your website, and in the till. Shopify and Square both have a SKU field on each variant, and both leave it optional, so it's easy to have a website full of products with no SKU at all. Fill it in with the same codes. How a store's own stock count works is in does Shopify have an inventory system and does Square do inventory, and labels with SKUs on the shelves are in inventory labeling ideas.

Get the template

Download the SKU builder. Two sheets: your codes and what each one means; and your SKUs, where you type a prefix and two codes and the SKU, a readable name and a check fill in. The check flags a duplicate, a SKU over 20 characters, or one that starts with a zero, and a ? in the name means a code that isn't on the codes sheet yet. The SKU formula is =UPPER(IF(A2="","",A2&"-")&B2&IF(C2="","","-"&C2)). It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.

Where this stops working

A spreadsheet of SKUs is a list. It doesn't stop the same SKU being typed twice on a website, it doesn't know that RM-FO-PLU goes into every plumeria candle, and it can't say how many TIN04-PLU are on the shelf. Once a business has a few dozen SKUs in two places, the list and the stock drift apart.

How TaroStack does it

TaroStack gives every item, sold or bought, a SKU, and keeps one count against it.

One SKU, one item. Every item has a SKU, and no two items in a business can share one. SKUs take letters, numbers, dots, dashes, slashes and underscores, start with a letter or number, and search finds an item by its SKU or its name.

What you buy, too. Wax, oils and jars are items with their own SKUs, and each supplier's own code for them is kept next to the pack size and price, so your SKU stays yours whoever you buy from.

Barcodes and cases. An item can carry its barcodes as well as its SKU, scanned with a phone camera or a scanner when you count, receive and pick. A case of six is a unit of the same item, not a second SKU. And if you sell on Shopify, we set it up with you, matching your store's products to your items by SKU.

Items, SKUs, counting and barcodes are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.

Questions people also ask

What is an example of a SKU number?

JAR09-PLU: a 9 oz amber jar candle in plumeria. The size comes first and the scent second, so every 9 oz jar sorts together in a list.

How many characters should a SKU have?

About 8 to 12 is plenty for a small business: long enough to read, short enough for a shelf label and a phone screen.

Can I make my own SKU numbers?

Yes. A SKU is your own code, and nobody issues it. Barcodes are different: a UPC or GTIN for a retail package comes from GS1.

Should SKUs be numbers or letters?

Short letter codes for the parts are easier to read and say aloud than numbers alone, as long as the SKU doesn't start with a zero and digits are kept to the parts that are numbers, like a size.