SKU Numbers Explained: How to Create, Use, and Manage Stock Keeping Units

Running an e commerce business in the UK means juggling countless moving parts, but inventory management is one area you simply cannot afford to overlook. Whether you sell on your own website, Amazon UK, eBay, or multiple marketplaces, there is one tool that keeps everything organised behind the scenes: SKU numbers.

But what are SKU numbers exactly, and why do they matter so much in retail, fulfilment, and warehouse operations?

In this guide, we break down everything you need to know, from the basics of SKU meaning to advanced strategies used by established retailers. We will explore how SKUs support stock control, sales reporting, forecasting, and customer satisfaction. Most importantly, we'll explain how Blue30 helps UK brands create, manage, and optimise SKU systems that genuinely improve business efficiency.

If you are building or scaling an e commerce brand, understanding SKU numbers is essential. Let’s dive in.

What Are SKU Numbers?

SKU stands for Stock Keeping Unit. A SKU number is a unique alphanumeric code assigned to each individual product you sell. Think of it as your product’s identity card. The purpose of a SKU is to help you identify, track, sort, and manage your stock with absolute accuracy.

A well structured SKU typically contains key product details such as:

• Category

• Size

• Colour

• Material

• Version or style

• Unique identifier

  
  

For example, a SKU for a blue men's T shirt might look something like:

MTSBLU L 001

This tells your team and your fulfilment provider that it is a men’s T shirt, in blue, size large, with its own unique style code.

Unlike barcodes or UPC codes, SKU numbers are entirely created by the retailer. That means you have full control to design a system that works for your business needs, warehouse layout, and product variety.

At Blue30, we work closely with sellers to develop SKU formats that simplify inventory management and minimise fulfilment errors across multiple sales channels.

Why Are SKU Numbers Important in ECommerce?

If you run a small shop with only a handful of products, you might be able to get away without a formal SKU system. But the moment you sell variations or scale your range, SKU numbers become essential.

Here are the reasons why.

Better Inventory Tracking Across Multiple Locations

One of the biggest challenges for e commerce brands is maintaining accurate, real time stock levels. SKU numbers give you total visibility over what you have and where it is stored.

With a proper SKU system, you can see:

• Stock levels at each warehouse location

• Incoming and outgoing inventory

• Fast selling products

• Items nearing reorder thresholds

For businesses partnered with Blue30, this becomes even more powerful. Our fulfilment technology integrates your SKUs directly into our warehouse systems, allowing seamless tracking from arrival to dispatch.

Improved Sales Reporting and Product Performance Insights

SKU numbers make it easier to understand what is actually driving your revenue.

You can track:

• Best selling variations

• Seasonal trends

• Slow moving stock

• Colour or size performance

• Product life cycle patterns

These insights allow you to make informed decisions about restocking, discontinuing lines, or expanding your product variations.

Brands using Blue30 often rely on their SKU data to plan promotions, negotiate better supplier terms, and forecast future demand.

Faster and More Accurate Order Fulfilment

When your warehouse team can instantly identify items from their SKUs, it reduces picking errors and speeds up the dispatch process.

A strong SKU system:

• Reduces mispicks

• Reduces returns

• Speeds up packing

• Supports automation

• Ensures the right product reaches the right customer

This is why fulfilment centres like Blue30 emphasise consistent, well organised SKUs. It directly affects operational efficiency and customer satisfaction.

Better Customer Experience and Higher Retention Rates

Customers expect accuracy, availability, and speed. SKU numbers play a major role in delivering that experience.

SKUs support:

• Automatic restocking alerts

• Alternative product suggestions

• Faster customer service responses

• Better stock availability

• Lower out of stock rates

Imagine a shopper searching for a specific size and colour. Your system uses SKU data to find similar alternatives instantly, increasing the likelihood of a sale.

How to Create SKU Numbers for Your Online Store

There is no industry wide rule for creating SKU numbers. However, there are best practices used by successful retailers across the UK.

Below is a step by step guide.

Establish a Clear Naming Structure

Consistency is key.

Start by choosing a structure such as:

• Category code

• Attribute code (colour, size, material)

• Style or model number

• Unique number if needed

  
  

Example format:

Category Size Colour Style

This makes it easy for staff and systems to interpret.

Make Each SKU Completely Unique

A SKU number must identify one product variation only. Never reuse or recycle SKUs, even if a product is discontinued.

Avoid confusing characters like O and 0, I and 1 to reduce scanning and manual entry mistakes.

Organise Products by Similarity

Group similar items together by using logical prefixes.

For example:

• All men’s hoodies start with MH

• All women’s sports leggings start with WSL

• All accessories start with ACC

This makes inventory navigation quicker for both staff and fulfilment partners.

Include Relevant Product Information

Depending on your range, you may want to incorporate details like:

• Material

• Season

• Weight class

• Fragile handling code

• Packaging requirements

• Warehouse zone

  
  

A SKU for a fragile ceramic vase might read:

VAS WH L GR 002 FR

This tells your fulfilment centre everything they need to process it correctly.

SKU Management Systems: What They Are and Why You Need One

As e commerce businesses grow, manual SKU tracking becomes practically impossible. SKU management software automates the entire process.

Common features include:

• SKU generation tools

• Stock syncing across all marketplaces

• Barcode scanning

• Real time stock updates

• Sales insights

• Low stock alerts

• Reporting dashboards

• Warehouse integration

If you sell across Amazon UK, Shopify, TikTok Shop, and eBay, SKU management software ensures your listings stay consistent and your stock remains accurate.

Blue30 integrates with leading platforms and can help you choose the right system based on your business size and growth plans.

How to Implement SKUs in Your Store: Practical Steps

Once you have created SKU numbers, the next step is using them effectively.

Set Smart Reorder Points

Use sales history and lead times to calculate when new stock should be ordered.

For example:

If a product sells 200 units per month and supplier lead time is 3 weeks, you need a reorder point that prevents stockouts.

Systems used by Blue30 can automate alerts so you reorder before it becomes a problem.

Build Packaging and Handling Instructions Into SKUs

This removes guesswork during fulfilment.

Codes to include might be:

• BX for box

• PB for polybag

• FR for fragile

• HZ for hazardous

• C1 for chilled items

This ensures your products are handled correctly every time.

Use Real Time Inventory Monitoring

Real time visibility prevents overselling and ensures accuracy across multiple platforms.

Tools include:

• RFID scanners

• Barcode systems

• Cloud based inventory software

• Mobile stock apps

Blue30’s system updates stock levels instantly as items are picked, packed, or received into the warehouse.

Alternatives to SKU Numbers: How Do They Compare?

If you’ve ever wondered how SKUs differ from other product identifiers, here is a quick breakdown.

SKU vs UPC

SKU numbers are internal and unique to your business.UPCs are universal product identifiers used globally.

UPCs are issued by GS1 and are used mainly for retail checkout systems, whereas SKUs allow you to track detailed product variations.

SKU vs Barcode

A barcode is simply a visual representation of data, often containing a SKU number.A SKU is the code itself a barcode can display.

You can have barcodes for your SKUs or barcodes for your UPCs.

SKU vs Serial Number

Serial numbers identify individual units.SKU numbers identify product variations as a whole.

A batch of 500 items could share one SKU but have 500 unique serial numbers.

FAQs About SKU Numbers

Here are some common UK based questions relating to SKU numbers.

What is a SKU in logistics?

A SKU in logistics is a unique identifier that enables precise stock tracking, warehouse organisation, and fulfilment accuracy.

How do you calculate a SKU number?

You don’t calculate it you construct it. Use product attributes to build a standardised code that your team and systems can understand.

How do you generate SKU numbers?

You can generate them manually or use a SKU generator inside inventory software. The key is consistency and clarity.

What are the four types of SKUs?

Broadly speaking:

• Manufacturer SKUs

• Retailer SKUs

• GTIN based identifiers

• Custom SKUs for internal systems

  
  

What is the difference between a SKU and an item number?

An item number is often provided by the manufacturer.A SKU is created by the retailer for their own stock control system.

Why SKU Numbers Matter and How Blue30 Can Support You

SKU numbers might seem like a small detail, but they are one of the most important parts of running a successful e commerce business. They streamline your operations, reduce errors, improve customer experience, and give you accurate stock insights that drive smarter decision making.

At Blue30, we help UK businesses create, organise, and optimise SKU systems that scale with their operations. Whether you are launching your first product range or managing thousands of SKUs across multiple sales channels, our fulfilment technology and expert team ensure absolute accuracy at every stage.

If you want your inventory to run smoothly, your fulfilment to be faster, and your customer experience to improve, strengthening your SKU strategy is the first step.

Ready to streamline your stock control and improve your fulfilment performance? Contact Blue30 today to discover how our SKU friendly systems can transform your e commerce operations.