How to Create a SKU Numbering System (With Examples)

SKU stands for stock keeping unit. It's a code you make up for your own business, one per distinct thing you stock. "Blue T-shirt, size medium" gets one SKU. "Blue T-shirt, size large" gets another. Unlike a UPC, nobody else has to recognize your SKUs. They only have to make sense to you and anyone who helps you.

That freedom is exactly why so many small sellers end up with a mess: some SKUs are numbers, some are product names, some are whatever the supplier printed on the box. A simple, consistent pattern fixes that.

What a SKU is for

• Picking: you read the SKU on an order and know what to grab.
• Counting: you count by SKU, so similar items don't get lumped together.
• Selling in more than one place: the same SKU on eBay, your website and Mercari is how your tools (and you) know they're the same item. See how to prevent overselling.
• Reporting: sales by SKU tell you which sizes and colors to reorder.

A simple five-part pattern

Most small stores need only some of these parts. Put them in order from general to specific:

1. Category (2 to 4 letters): TS for T-shirt, MUG, BK for book.
2. Brand, style or design (2 to 4 letters): XMS for a Christmas design, NKE.
3. Main variant (color, material): BLU, RED.
4. Second variant (size, capacity): M, XL, 16.
5. Sequence number (3 to 5 digits): 0042. This guarantees uniqueness.

Read those out loud. You can tell what each item is without looking anything up, and they sort neatly in a spreadsheet because the category comes first.

A pattern for resellers with one-of-a-kind items

If you sell thrifted, vintage or used items, most of your stock is a quantity of one, and variants don't repeat. A detailed pattern is wasted effort. Many resellers use a shorter format instead:

The sourced date tells you how long an item has been sitting, which is useful when you decide what to discount. Store the shelf location separately (see bin locations) so you can move items without renaming them.

What to leave out

• Location. Items move. If the shelf is in the SKU, you have to rename the SKU every time you rearrange. Keep location in its own field.
• Price and cost. They change. A SKU should not.
• Supplier part numbers. Record them in a separate column. If you switch suppliers, your SKUs stay the same.
• Letters that look like numbers. O and 0, I and 1, S and 5 cause misreads. Many sellers simply avoid O and I.
• Spaces and symbols. Stick to letters, numbers and one separator (a dash is the most readable).
• A leading zero. Spreadsheet programs like Excel may strip leading zeros from cells they treat as numbers, turning 0042 into 42. Start with a letter.

Rolling it out without stopping sales

1. Write your rules down on one page: the parts, the abbreviations, the separator. Our SKU naming worksheet is made for this.
2. Make an abbreviation list for categories and colors, and stick to it. "BLU" every time, never "BL" one day and "BLUE" the next.
3. New items first. Give every new listing a SKU in the new format from today.
4. Convert old items in batches, a shelf at a time, during your regular counts.
5. Put the SKU everywhere: on the bin label, in the marketplace's SKU field (eBay calls it the custom label), and in your spreadsheet or inventory app.

Common mistakes

• Using the UPC as the SKU. It works until you have two conditions of the same item (new and used), or a bundle. Then you need your own code anyway. See SKU vs UPC vs ASIN.
• Reusing old SKUs for new products. Your sales history gets mixed up. Retire a SKU, don't recycle it.
• Too clever. Codes that need a key to decode slow everyone down. Readable beats compact.