Inventory glossary

What is SKU?

SKU stands for stock keeping unit.

A SKU is the base unit for almost every inventory decision you make. If you sell a t-shirt in three colors and four sizes, that is twelve SKUs, not one product, because each combination can sell differently and run out at a different time.

Use SKUs to track stock levels, sales history and reorder needs separately for each variant. This matters most when some sizes or colors sell faster than others. Treating the whole product as one number hides the fact that you are out of medium while still sitting on large.

Example

A candle shop sells one candle in three scents: vanilla, lavender and cedar. Each scent gets its own SKU: CANDLE-VAN, CANDLE-LAV, CANDLE-CED. Vanilla sells 40 units a month, lavender sells 25, and cedar sells 10. Tracking them as three SKUs instead of one "candle" line shows the owner that cedar needs a much smaller reorder than vanilla.

Common mistakes

  • Using one SKU for a product that has multiple variants, which hides which variants are actually selling.
  • Reusing an old SKU code for a new, different product, which corrupts sales history.
  • Creating inconsistent SKU formats across the catalog, making it hard to sort or search inventory later.

SKU and SteadyShelf

SteadyShelf forecasts sales and sets order-by dates at the SKU level, since each variant can have its own demand pattern and its own case pack from the supplier.

SteadyShelf is launching on the Shopify App Store. Join early access to get the install link first.

Related terms

Variant · Case pack · Demand forecasting · SKU rationalization · Inventory accuracy

Full inventory glossary

FAQ

Is a SKU the same as a product?

No. One product can have many SKUs. A shirt in two colors and three sizes is one product but six SKUs, since each color and size combination is tracked on its own.

Do I need a SKU for a product with no variants?

Yes. Even a single-version product, like one scent of candle with one size, needs its own SKU so you can track its stock and sales separately from everything else you sell.

Let SteadyShelf do this math for every SKU

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