Dealers face unique challenges in managing inventory. Items may be stored in a warehouse, displayed in a shop, sent away for restoration, or listed on multiple online marketplaces. Various methods are used to track inventory, from spreadsheets to handwritten lists, each of which comes with a risk of human error. Inventory management can be significantly simplified by implementing a SKU system.
What is a SKU?
SKU stands for ‘stock keeping unit.’ It is a unique alphanumeric code you create for your items, allowing you to track stock internally – like a stock number but with more precision. SKUs can help prevent problems like double listings, and they give you more information on your items.
A SKU can be made up of many different bits of information, including the type of item, the maker, material, whether it has been restored or not – or anything that helps you easily identify key information. Get your SKU system started by following the three steps below.
Determine how you want to start your SKUs. A popular technique is to start with an abbreviation of the category for a piece, or its warehouse location.
You can create characters that are easy to remember, such as FUR for furniture, VAS for vases, or whatever makes sense to you.
One important note: Ensure you write SKUs in the same order every time. If you lead with the category, always lead with that.
Add the numeric portion of your SKU, assigning each piece a unique number. You may choose to start with 1000, and as you add each SKU to each piece in your inventory, move up to 1001, 1002, etc.
For example, if you have a vase category (VAS), the first item could be VAS1000.
Avoid starting your SKU with a 0, Excel and other programs will often strip out the ‘0’ and cause confusion when gathering data for analytics or exporting your listings.
If you want your SKUs to tell you more about each item, you can create codes for different aspects of your inventory such as style, year, maker, color, location, discount, etc. Determine the codes you want to include, then add them to the SKUs you’ve created so far, as appropriate.
For example, if you have a piece that has been restored, rather than checking through your records to find it, you could create a code “R” to easily recognize it. If a vase has been restored, the SKU could be VASR1000 or VAS1000R, etc.
Standard SKUs range from 8-12 characters, but you can use as many letters and numbers as you need. The beauty of a SKU system is that it is completely customizable, create as many categories as makes sense for your business.
Key Benefits of Using a SKU System
When managing inventory across online marketplaces, you risk duplicating listings. Buyers may purchase an item you no longer have in stock due to an unknown duplicate listing being left active. SKUs are an easy way to identify an item to prevent listing it more than once.
Tracking Multiple Quantities Listed Separately
Some dealers prefer to list pieces with multiple quantities separately and as a set. This can cause confusion and lead to duplicates. SKUs are an effective way to keep track of separately listed multi-quantity pieces and easily identify which listings to take down after a sale.
Analyzing Sales Trends
You can evaluate popularity and sales trends based on the codes you incorporate in your SKUs. Identify patterns in sales of categories, periods, and more.
Recognizing sales trends can also be helpful when choosing online eCommerce marketplaces to list your items. For an overview on choosing marketplaces, read our blog, Online Marketplaces: They Are Not All the Same.
Avoiding Confusion with Similar Listing Titles
Many dealers collect and sell items that are similar to one another, especially in titles. SKUs prevent the need to differentiate items by title and ensure you find exactly the piece you are looking for.
Finances & Taxes
Having SKUs will come in handy when reviewing annual sales for tax reporting purposes, especially if you need to look up a particular item in a hurry. You can even add specific tax codes to your SKUs if you are selling in multiple regions or dealing with items that have varying tax code requirements.
Once you’ve implemented your SKU system across your marketplaces, you’ll want to incorporate an inventory management system. The Ronati eCommerce Manager (eCM) is the first comprehensive inventory and online marketplace management tool built exclusively for dealers of art, vintage, and antique items. Combining the eCM and your SKU system can help take your business to the next level.