In this article, find out everything you need to know about SKUs and how they help you organise your business on Amazon.
Merchants on one of the world’s largest online marketplaces usually have to deal with Amazon SKUs first. This alphanumeric code often leads to confusion with other number sequences, such as the ASIN or EAN.
Amazon SKU Definition
SKU is a general industry term and is an abbreviation for “Stock Keeping Unit”. The terminology originated in warehousing and inventory management as a way to identify a sales item with a unique code.
In the case of Amazon, this code is especially important for third-party sellers who sell their goods via the online platform. Sellers assign a distinctive string of letters and numbers to each of their sales items. This enables them to keep track of their products at all times. In addition, the codes can contain the following information:
- Product features
- Source or supplier
- A rough description of the product group
- Seasonal data, e.g. the number of items that you sell within a certain season (e.g. garden chairs in summer, scarves, and hats in winter)
- Cost information
- Product dimensions
- Warehouse location
If an item is different in any way from another item from the same retailer, it will also have its own SKU. These SKUs are an important part of Amazon’s infrastructure – so important, in fact, that a product cannot be sold on Amazon without one. So if you don’t create such a code yourself, the company will automatically create one for you.
Tip: Never use the same SKU for different or even similar products. This will only lead to confusion. Before creating your first SKU, try to develop a standard format and always follow it as a guide in the future. Write down the rules for doing this and make sure that everyone in your company follows them.
Create your own SKU or have it created – advantages and disadvantages
Creating your own SKU comes with lots of advantages and, basically, no disadvantages:
- You are able to describe and quickly identify a product if you design your code in a meaningful way
- You can quickly find out where your goods are stored, which saves time in picking and packing
- You can easily track the performance of individual products and product groups
- You can standardise SKUs across multiple platforms. This gives you a comprehensive overview of all sales – not just sales on Amazon.
On the other hand, an SKU that is automatically created by Amazon has some disadvantages:
- The sequence of numbers and letters is basically meaningless to you and does not refer to specific attributes of your product
- The SKU does not contain any relevant data for your business
- If you run two or more shops that sell the same products, this can lead to confusion, as Amazon will assign different SKUs to each of these products.
- You miss out on the saved time and effort that a self-created SKU can provide.
Differences between SKU, EAN and ASIN
EAN is an acronym for “European Article Number”. This refers to a binary barcode and a twelve- or thirteen-digit sequence of numbers. The latter is called the Global Trade Item Number, or GTIN.
Cashiers at retailers read this barcode at the checkout, for example, to determine the price of a product. But they also help to identify a specific product on Amazon and outside of Amazon.
For each physical item, Amazon also adds an ASIN number. ASIN stands for “Amazon Stock Identifier Number”. This identification number allows the online retailer to catalogue all the products that they sell. As a result, the ASIN is of no importance for the purposes of a third-party vendor.
A key difference between these two identifiers and the SKU is that traders have no control over them. Consequently, they are not necessarily helpful for the logistical and sales activities of third-party sellers on Amazon.