Stock Keeping Unit - SKU

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DEFINITION of 'Stock Keeping Unit - SKU'

A store's or catalog's product and service identification code, often portrayed as a machine-readable bar code that helps the item to be tracked for inventory. A stock keeping unit (SKU) does not need to be assigned to physical products in inventory. Often, SKUs are applied to intangible, but billable products, such as units of repair time or warranties. For this reason, a SKU can be thought of as a code assigned to a supplier's billable entities.

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BREAKING DOWN 'Stock Keeping Unit - SKU'

SKUs are used by suppliers within their data management systems, to help track amounts of product in inventory, and/or units of billable entities sold. SKUs help suppliers be able to track efficiently, the numbers of individual variants of products/services sold or remaining in stock. They are not to be confused with the model number of a product, although model numbers and attributes are often included to form all or some of a SKU.

For example, a tire with a model number of 45790 and a size of 32", may have a SKU of 45790-32.

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