The Benefits and Important of SKUs

Managing inventory with SKUs (Stock Keeping Unit) is important for any business that stores or sells products. SKU management allows you to tag any stock unit(s) in your warehouse/inventory room with a unique number or code to help you easily track your inventory. 

Tracking Inventory

Creating and using SKUs helps you easily track your inventory items and their variants in lists, invoices, manufacturing and purchase orders. Lengthy product names and variant attributes can cause communication errors which in turn can affect your inventory’s accuracy and shrink. 

As a distributor inventory moves in and out on a constant basis. Knowing where your inventory is in relation to the product life flow cycle is imperative especially when dealing with distributions to multiple locations and multiple drivers out deliveries. 

Replenishing Inventory 

Managing large amount of inventory can be challenging for any businesses of all sizes. By implementing SKUs to each product, you can keep better track of your inventory level, organize based on priority level of the product, and replenish as needed. 

As orders come in and shipments go out you must replenish inventory to keep your clients orders fulfilled. This creates a trusting ecosystem of reliable inventory and on time orders being fulfilled. Tracking what you sent out for orders, what you have in stock, and doing some inventory forecasting can help the replenishing process significantly. 

Identifying Profits 

According to TradeGecko  “By tracking product variants with SKUs you can report not just on the main product line, but right down to the individual variation of the product, i.e. color, size, material. These reports can help determine which product variants are your best sellers and which are underperforming. Not only does this give you a clearer picture of your major profit streams, but also helps you make strategic product decisions to grow your business.”