Red Ink Diary

Edited to fix oopsie, see comments below. 8/23/09

This is part of an ongoing series of articles aimed at the smaller seller, you can find them all by typing Selling Made Simple into the search box on the top of the right navigation column.

Before we start on SKUs let us revisit the method in the madness; my three golden aphorisms.

• If you do not have a methodical approach in business you will mess up.
• No matter how sophisticated your record keeping system is, if you do not use it, it is useless.
• Keep it simple

What are SKU and why do I need them?

SKU is an acronym (def. #1) for Stock Control Keeping Unit, yes, we all know control is not spelled with a ‘K’ but that is what it is called.

• A SKU is a unique (def. #1, 2) identifier you assign to your product.
• A SKU can be up to 40 characters long and can contain both letters and numbers.
• SKUs allow you to control your inventory without rummaging through boxes.
• Used properly a SKU will save you hours of time and untold stress.
• Used properly a SKU will not only help you identify the item but find it.
• SKU’s are not just for sellers of the shiny and new.
• SKU’s can help identify your source or supplier of the item, useful for reordering or for keeping track of consignment stock.
• SKUs simplify accounting.
• Can let you see how long an item has been in stock.
• Help identify sales trends
• Can assist in making a discount or sale price strategy
• If you want to sell on Amazon you should use SKUs (more on that another time)

Keeping it Simple

Think about what you want to get from a stock control system before diving in to create one.

An example:

You are a collectibles seller. You have two shelf units with boxes in which you keep your stock. If you sell an item you will have to go through every box on all five shelves of both units to find it before you can pack and ship because you paid your daughter to clean and she moved all the boxes before putting them back on different shelves.

If every unit was numbered and each shelf was labeled with a letter and every box had the shelf letter and a number on the outside there would be no problem because she would have been able to put them back where they belong.

If every item in the box had a SKU sticker with the shelf letter, box number and an item number you would be unlikely to ship the USA made Desert Rose dinner plate to a buyer who bought the English made one, which would have a different number because it was not identical to the seven USA made dinner plates you own or the flower back-stamped plate. Naturally the salad plates stored in the same box would have their own numbers too.

A really simple SKU for this item might be Unit 2 - Shelf A - Box 3 - Item 9  or 2A39

If that plate belonged to Auntie May you could have further identified it with her initials and the date she asked you to sell it, 2A39am0209.

Example 2:

You sell multiples of brand new stock, golf shirts in a variety of styles, colors and sizes. It is important to know what colors and sizes you have in stock and where they are. The buyer of style “PupTent” in size XXXL in yellow is probably not going to be delighted when you tell him you only have it in pea green and pink because you can’t find the yellow one.

Using your suppliers model number which is often a portion of the UPC (Universal Product Code) found under the bar code on the product label and putting it in your listing can help lead buyers to your product.

More thoughts:

If you are a small seller setting up an SKU system will be quick and easy to do.

When I check inventory I always find something that I missed, idle stock is not going to make you money. I am often reminded of some item which is not so treasured anymore and needs a new home.

Cross reference your SKU number to your stock database or item card by writing it down as you acquire, process and store the item.

Y’all come back!

Full disclosure: I am an ex-eBay seller currently selling on my own website and Bonanzle and I really try to practice what I preach.