What is a 'Stock Keeping Unit' (SKU)?

A Stock Keeping Unit (SKU) is defined as a unique identifier for each distinct product and service that can be purchased. This identification system is crucial for inventory management and enables businesses to track inventory levels, sales, and specific characteristics of the products they sell. The SKU typically includes information such as size, color, model, and other attributes that differentiate one item from another.

Using SKUs helps businesses streamline their operations, making it easier to reorder stock, manage inventory, and analyze sales trends. By assigning a unique SKU to each item, retailers can accurately track which products are selling and which are not, facilitating more informed decision-making regarding stock levels and product management.