What is SKU (Stock Keeping Unit)?
Definition
SKU (Stock Keeping Unit) is a unique alphanumeric code assigned to each distinct product variant in an inventory system. SKUs are used to identify and track specific products, including variations in size, color, style, or other attributes.
Detailed Explanation
Every product sold on an e-commerce marketplace has a unique identifier. This identifier is the SKU. Two t-shirts of the same design but different colors (Red vs. Blue) will have different SKUs. Two t-shirts of the same design and color but different sizes (M vs. L) will also have different SKUs.
SKU vs. Other Identifiers
- SKU: Seller's own product identifier, used for internal tracking
- ASIN (Amazon): Amazon's unique product identifier
- Product ID / Barcode: Universal product code (EAN/UPC)
- Listing ID: Marketplace's identifier for a specific product listing
Why SKUs Matter for Sellers
- Inventory management: Track stock levels for each product variant
- Order fulfillment: Pick and pack the correct product variant
- Sales analysis: Understand which product variants sell best
- Profitability analysis: Calculate profit at the product level, not just overall
- Cost tracking: Associate purchase/manufacturing cost with specific products
SKU-level Profitability
One of the most powerful uses of SKU data is SKU-level profitability analysis. By tracking profit at the SKU level, sellers can identify which products are genuinely profitable and which are losing money. This enables better pricing decisions, product selection, and inventory management.
EcomPL provides SKU-level profitability analysis by combining marketplace order data with seller-provided product costs for each SKU.