What does the term 'stock-keeping unit' (SKU) refer to?

The term 'stock-keeping unit' (SKU) refers to a unique identifier for each product. An SKU is a specific code that retailers and manufacturers use to track inventory. Each SKU represents a distinct item in terms of its attributes, such as size, color, and model. This unique identification is crucial for inventory management systems because it enables businesses to efficiently monitor stock levels, facilitate order processing, and streamline the management of products across various sales channels.

The use of SKUs helps businesses quickly locate items, manage inventory more effectively, and optimize restocking processes. Each time a product is sold or received, the associated SKU helps ensure that accurate inventory records are maintained. This ultimately supports better decision-making regarding purchasing and sales strategies while minimizing the risk of stockouts or overstock situations.