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Understanding Stock Keeping Units (SKUs)

How to use Stock Keeping Units organize your articles

What are Stock Keeping Units

To keep order fulfillment and tracking simpler, merchants need a way to group their inventory articles, and this is when Stock Keeping Units (SKUs) come in. SKUs are a commonly used categorization method in the field of inventory management to simplify the order fulfillment and tracking processes.

  • A Stock Keeping Unit (SKU) is the unique identifier of your inventory Articles.
  • SKUs are used to track and group your inventory assets.
  • Use an SKU to define a distinct type of asset in your inventory.
  • Each article in your inventory will belong to one SKU.
  • Track usage of your inventory articles by defining the SKU as Individual or Bulk (total quantity of articles).

Businesses may have different ways to use Stock Keeping Units, depending on the complexity of their inventory.

For example, a bike shop offering rentals may have bikes from two different manufacturers in their rental inventory. Still, essentially, they both serve the same purpose and have the same price. In this case, the bike shop could combine the bikes from both manufacturers under the same SKU because it doesn't matter which manufacturer's bike is used to fulfill an order.

Even though the shop would group the bikes from two manufacturers under the same SKU, each article still has its own ID or article number. Therefore, the shop can still store metadata, including the manufacturer's brand, bike model, color, etc., and track the usage on an article level.

Example:

Articles without difference

  • Bikes from manufacturer A: 10
  • Bikes from manufacturer B: 10

Articles using the SKU code "BIKE": 20

 

However, product variations are one example of a need for two separate SKUs. Let's say the bikes come in different sizes. In this case, the shop needs to have two different SKUs to distinguish the articles in various sizes from each other.

Example:

Articles are different in sizes

  • Small Bikes from manufacturer A: 5
  • Large Bikes from manufacturer A: 5
  • Small Bikes from manufacturer B: 5
  • Large Bikes from manufacturer A: 5

Articles using the SKU code "BIKE-SMALL": 10

Articles using the SKU code "BIKE-LARGE": 10

 

Of course, it is possible to create separate SKUs for both manufacturers' bikes when it makes sense. It is up to the manager to decide how fine graded SKU structure she wants to create and maintain.

Creating Stock Keeping Units in Rentle

To create SKUs, navigate to the Inventory section through the main menu and select Stock Keeping Units. Creating an SKU is simple. Click Add SKU and define a name, code, and tracking type.

Name: Human-readable name of your SKU

Code: The unique identifier of your SKU

Tracking type: The inventory type distinguishes whether you want to track products individually, for example, with a serial number or in bulk.

Next, connect your product catalog with the inventory.

 

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