What is a SKU? SKU vs UPC and a simple scheme for variants

What a SKU is

A SKU, short for stock keeping unit, is a flexible code you create yourself to track your own inventory. Each SKU stands for one exact version of a product. Example: a candle sold in three scents and two sizes is six SKUs, because each scent and size combination is a separate thing to count on the shelf and to pick for an order.

Nobody issues SKUs and nobody charges for them. Etsy's help center says a SKU can be numbers, letters, or a combination of both, whatever helps you organize your stock. Shopify treats the SKU field as optional, but notes that many apps and services require SKUs to sync inventory, and that once you use SKUs, each product and variant must have its own unique SKU.

A useful SKU is short, uses only capital letters, numbers and hyphens, and follows the same pattern for every product. Someone packing orders should be able to read one and know roughly what is in the box without opening the listing.

SKUs matter most once you sell in more than one place. If the same candle sells on Etsy, in your own store and to a gift shop, one SKU ties all of those orders back to one shelf count.

SKU vs UPC: what each code is for

People mix up SKUs and UPCs because both sit on a product record and both can be printed on a label. They do different jobs. A SKU is yours and means something only inside your business. A UPC is a shared number that any store, scanner or marketplace can read.

The number inside a standard UPC barcode has 12 digits and is called a GTIN-12. GS1 US describes a GTIN as a universal, permanent identification number issued exclusively by GS1, and points out that multiple retailers might sell the exact same item with the exact same universal GTIN, but each retailer will assign it a completely different, unique SKU.

You can run a shop on SKUs alone until someone outside your business has to scan or match your product. That point is covered further down this page.

How to create SKU numbers in five steps

This method works for a shop with five products or five hundred. Do it once, write the rules down, and give every new product a SKU the same way.

1. List what makes each variant different

   Write down every choice a buyer makes: scent, size, color, material. These become the parts of the SKU. Leave out anything that does not change what goes in the box, such as the listing photo or the batch date.

2. Give each value a short code

   Pick a short code for each value, for example LAV for lavender, CED for cedar and BLK for black. Keep the list in one document. Shopify's advice is to use the same abbreviations consistently across all products: if BLK means black on one product, it means black on all of them.

3. Fix the order of the parts

   Put the broadest part first and the most specific last: product type, then the style or scent, then the size or color. Use the same order for every product, so related SKUs sort next to each other in a spreadsheet.

4. Keep it short and plain

   Shopify suggests no more than 16 characters, and Etsy recommends 4-8 characters for most inventory. Etsy also advises you to avoid the letters O and I, which can easily be mistaken for numbers, and to avoid symbols such as commas or slashes, which may confuse programs like Excel. Shopify notes that special characters, symbols and spaces can cause search problems, while dashes and underscores are useful for separating attributes.

5. Enter the same SKU everywhere you sell

   Add one SKU per variant in each store and on your stock sheet, typed exactly the same way. Shopify points out that SKUs are case-sensitive, so ABC123 and abc123 count as different SKUs. Never reuse a retired SKU for a different product, or old orders and reports will point to the wrong item.

Example: a SKU scheme for scent, size and color

Example: a small candle shop sells soy candles in three scents and two jar sizes, and wax melts in two colors. The scheme is product type, then scent or color, then size. Each part is a short code, and the parts are joined with hyphens.

Anyone reading CND-CED-16 can tell it is the large cedar candle. Sizes use two digits, so 08 sorts before 16. None of the codes use the letters O or I. Each SKU in the example is ten characters, which fits Shopify's advice of no more than 16 characters. Dropping the hyphens gets each one down to eight, which fits Etsy's recommendation of 4-8 characters, at some cost to readability.

To add a new scent, add one three-letter code to your list. To add a new size, add one two-digit code. The rest of the scheme stays the same, and no existing SKU has to change.

The same pattern fits other products. Example: TEE-BLK-M for a black T-shirt in medium, EAR-GLD-SM for small gold hoop earrings, and PRT-A4-MT for a matte art print in A4.

Using one SKU scheme on Etsy, Shopify and wholesale

The point of a scheme is that one product has one SKU everywhere. If the large cedar candle is CND-CED-16 on Etsy, it should be CND-CED-16 in your own store, on your wholesale line sheet and on your stock count. Etsy's help center describes SKUs as a way to track your overall inventory as you fulfill orders across multiple channels, like Etsy and a personal website.

Fill in a SKU for every variant, not only for the main product, so each order line shows exactly which version to pack. Shopify's help center asks for SKUs added to each product variant rather than just the main product. Etsy and Shopify put the SKU in slightly different places, as the table shows.

Wholesale buyers order from a line sheet or order form. Put your SKU next to each item so their purchase order uses your codes and your packing list matches it line by line. The store will usually give the item its own SKU in its own system, as GS1 US describes above. Your SKU on the packing list and the UPC on the item connect the two records.

When you need a UPC as well as a SKU

You need a UPC when someone outside your business has to scan or match your product. GS1 US says that for most retailers, having a UPC code on your product is a requirement to sell your product, and Shopify notes that some sales channels might require a GTIN before a product can be published.

UPCs go one per variant, the same as SKUs. GS1 US puts it plainly: each variation of each product you sell requires a unique barcode. In the candle example, a gift shop that scans barcodes would need a UPC for each of the eight SKUs, not one per product line.

From GS1 US, a single GTIN costs $30, with no annual renewal fee. A GS1 Company Prefix costs $250 up front and $50 a year for up to 10 items, and larger capacities cost more. Be careful with cheap barcodes sold by resellers: GS1 US warns that GTINs sourced from unauthorized third parties may already be associated with another company or product.

In Shopify, the UPC goes in the barcode field, not the SKU field. Shopify accepts a UPC of 8 or 12 digits and lets you keep both a SKU and barcodes on the same product, each in its own field.

Common SKU mistakes

SKU problems often show up later, once the catalog has grown. These mistakes are easy to avoid when you set up the scheme and slow to fix once you have many products.

• Putting the price, cost or a date in the SKU. Prices change, and the SKU then says something false.
• Using a supplier's product code as your SKU. If you change supplier, the code changes and your sales history splits in two.
• Giving two variants the same SKU. Stock counts merge, reports blur and orders can ship the wrong version.
• Typing the same SKU differently in different places. Shopify says sync issues across third-party apps are most likely due to SKUs that are missing or don't match.
• Making SKUs too long. A code that does not fit on a small label gets shortened by hand, and the copies stop matching.
• Changing the scheme halfway through. Keep existing SKUs as they are and apply new rules to new products only.

Where Nation fits

Questions about SKUs