Purpose of SKU (Stock Keeping Unit)

Introduction

Laymen explanation

If you are a businessmen selling garments, you must be interested to keep track of existing stock of items. For example, if you are keep varieties of short pants, you want to reorder each type when stock is getting over. SKU helps in this purpose.

Technical exaplanation

SKU, in full stock keeping unit, a code number, typically used as a machine-readable bar code, assigned to a single item of inventory.

For example, businesses selling running shorts create different internal SKUs for the shorts. Stores use SKUs for determining which items are in stock and which need reordering, as a method of growing profits.

SKUs are often used in catalogs, physical and online retail stores, warehouses and product fulfillment centers. Each business creates a different SKU for its goods and services.

Below pic shows SKU (stock keeping unit) codes, which are found on almost all retail products.

Reference

http://www.investopedia.com/terms/s/stock-keeping-unit-sku.asp

https://www.britannica.com/technology/SKU

https://en.wikipedia.org/wiki/Stock_keeping_unit