Amazon offers merchants the ability to create Amazon SKU numbers for every one of their products. This can be a huge time-saver, as it allows you to manage your inventory and orders from a single location.
Amazon currently has over 300 million active customer accounts and 1.9 million selling partners across the globe. This makes it one of the largest and most successful ecommerce platforms in the world.
However, with so many SKUs to manage, it’s important to ensure that you create and assign your SKU numbers correctly.
When paired with Amazon seller accounting software, you can use SKUs to track sales data, manage inventory levels, and streamline the ordering process. Let’s explore how to create and manage Amazon SKUs for your business.
What is an Amazon SKU number?
One of the first words many new Amazon sellers learn is "stock keeping unit" or "SKU" (pronounced skew). Amazon SKU numbers are unique alphanumeric codes used to track a product for inventory and sales purposes.
Typically, it includes product attribution details such as size, color, and any other pertinent information that you can glean at a glance.
For those who have experienced self-checkout at the grocery store, you've most likely purchased produce where you had to type in a four-digit number to determine the cost. That four-digit number is a SKU.
Your purchase told the system which item you selected, and it recorded the sales information. Essentially, this is how Amazon's SKU system works as well. SKUs play an important role in your ecommerce growth, so it’s necessary to understand the basics.
What is an ASIN vs. a SKU?
One of the most confusing things for Amazon sellers is understanding the difference between a SKU and Amazon’s ASIN numbers.
Amazon uses ASINs (Amazon Standard Identification Numbers) to identify products on their platform. ASINs are unique 10-character codes assigned individually to each product sold in the Amazon marketplace.
An ASIN simply means a product exists on Amazon for sale, but it is not the SKU you assigned. When listing products, configure your own SKUs, and don’t let Amazon configure them for you.
What are SKU attributes?
SKU attributes are the information you structure within your SKU. For example, when people buy a product, such as a TV, they’re looking for specific features or attributes such as brand, size, resolution, price, smart-capability, compatibility, etc. SKU attributes can help you manage your inventory.
How do I find my Amazon SKU?
You can find your Amazon SKU using a variety of methods, such as reviewing the information listed on your product page or accessing Amazon Seller Central. Additionally, your customers can find the SKU on their receipts or printed on the product's packaging.
You can also find your Amazon SKU using your browser's URL bar. On your product's listing page, in the address bar, locate the SKU number listed just after the "dp" section of the URL. On that same page, every product has a SKU or ASIN listed under its product information along with its dimensions, weight, and seller's rank.
In addition, if you have access to your Amazon Seller Central dashboard, you can use the inventory report to search for SKUs associated with your products.
Why do you need SKUs?
Simply put, SKUs help you keep track of your inventory. They provide valuable information at a glance, helping you save time and money. If you don’t use them, your system can become chaotic, and you’ll lose inventory efficiency.
SKU numbers make it possible for you to:
- Record losses.
- Make strategic inventory forecasting decisions.
- Track an item’s location within your warehouse.
- Improve inventory accuracy — no overselling.
- Identify shrinkage.
- Reconcile inventory in your Amazon inventory management software with items actually in stock.
- Make it easy for employees to look up inventory for customers.
- Perform profit analysis by SKU to determine best/worst sellers via attributes.
- Use the same SKUs on all your marketplaces.
- Improve communication with vendors.
- Pick, pack, and ship orders faster.
- Understand how long the product has been in your inventory.
Using SKUs correctly leads to better inventory management in ecommerce and tracking sales more efficiently.
Where do your SKUs live?
Many small businesses use a spreadsheet to track product SKUs. But it’s not the best way to manage your inventory.
Spreadsheets aren’t scalable and can become outdated quickly. Each SKU needs to be entered into your system of record, most likely your QuickBooks account.
To save time, ecommerce automation software can connect your Amazon store and your QuickBooks account so that you can sync inventory in real time.
If you sell on multiple marketplaces, it can use multichannel inventory sync capabilities to keep inventory counts updates across channels. This is where all the magic happens.
Should I let Amazon create my SKUs for me?
Simply, no. You should always create and manage your own Amazon SKU numbers instead of ASINs. Ideally, the SKU number in Amazon should be consistent across all your marketplaces and your QuickBooks account.
An Amazon integration with QuickBooks makes this easier to manage. Doing so will help you track profitability, calculate accurate margins, and recognize potential trends to grow your business.
Essentially, if you are selling on more than one Amazon store, Amazon will assign separate SKUs for the same products selling in different stores.
This can lead to confusion and chaos, not to mention a potential financial headache. So take the time to create your own SKUs for each product and store them in one central location.
- Some of the advantages of creating your own SKU include:
- Gaining greater control over inventory accuracy.
- Easily identifying items with different attributes (size, color, etc.).
- Having the ability to group similar items into one SKU.
- Optimizing inventory forecasting and planning.
- Quickly recognizing product trends.
- Easily tracking product performance and profitability.
- Streamlining the packing and shipping process.
Essentially, if you let Amazon create your SKUs for you, essentially, they’ll be meaningless to you. And they won’t specify the items you sell according to your preferences as a seller.
What is the best format for creating Amazon SKUs?
Your SKU format shouldn’t be random. It should reflect your inventory and how you want to organize and track it.
Create a SKU format that enables you to quickly gain information about your products and sales, pick orders quickly, and manage your inventory effectively.
Above all else, keep your SKUs consistent across your sales channels and QuickBooks account. Identical SKUs will all allow you to match, map, transfer, and update inventory across channels with a tool like Webgility.
Consider using the following Amazon SKU format suggestions.
- Broad descriptors: Identify the category or group your products belong to (i.e., BK for books or DF for dog food).
- Seasonal identifiers: Have seasonal products? Identify your products for their respective season within the SKU. This can help you identify which products to include in end-of-season sales. For example, you might identify a garden hose as a summer season product.
- Condition identifiers: Use a component of your SKU to indicate conditions such as new, used, or open box.
- Attributes: Sizes, colors, etc.
- Cost identifiers: You may choose to use what you paid for the product or the selling price.
- Warehouse location: This can help you quickly identify which warehouse the product is located.
- Date entered into inventory: This can help you identify what’s selling and what’s not.
- End with sequential numbers: Use sequential numbering (001, 002, 003) for the final series of a SKU to help you identify older versus newer items in a product line.
- Product source/supplier: Consider using two letters to identify your source or supplier (i.e., WM for Walmart).
Create SKU formats that represent warehouse locations, store locations, categories, etc. Build an architecture that your company will use for years to come.
However, keep in mind that you can’t exceed 40 characters in an Amazon SKU and that fewer characters are easier to manage.
Best practices for creating SKUs
Not all SKUs are created equal. Follow these 10 best practices for creating Amazon SKUs:
- Use the same SKU to refer to a product in all your stores across your channels and your QuickBooks account.
- Never use the same SKU for more than one product or variant of a product.
- Don’t stray from your SKU format. Once you’ve created a format for your SKUs, make sure subsequent SKUs match it.
- Document your rules for SKU creation and make sure everyone understands why you have a format, why they can’t deviate from it, and how the SKUs will help them.
- Avoid using a capital -I as it can easily be mistaken for the number one or a lowercase -l.
- Consider using all caps to identify a segment of your SKU, but do it consistently.
- Don’t begin a SKU with a zero as it can be misinterpreted by some data storing software.
- Know that you can use currency and other symbols in your SKUs, but they are not recommended.
- Avoid using spaces.
- Use underscores or periods to separate attributes and identifiers.