What is a SKU (Stock Keeping Unit)?

A SKU, short for stock keeping unit, is the unique identifier a retailer assigns to a distinct, sellable variant of a product. Two t-shirts of the same model but different sizes are two SKUs; the same size in two colors is two SKUs. The SKU is what inventory, pricing, and order systems track - not the abstract "product."

Definition

SKU codes are internal to a retailer and follow whatever naming convention the operator chooses. They differ from manufacturer-assigned identifiers such as GTIN or EAN, which are global and shared across retailers. A given product variant typically has both: an internal SKU for the retailer's systems and an external code for cross-retailer identification.

Why it matters

Catalog complexity grows with SKU count. A fashion retailer with 5,000 models in five sizes and four colors has 100,000 SKUs to track. Each one needs an image set, accurate inventory across locations, correct pricing per market, and the right metadata for search and filtering. Mistakes at the SKU level - wrong stock, wrong price, broken images - translate directly into lost sales and returns.

Frontend implications

The storefront usually presents a product as one unit and lets the shopper pick variants. Behind that interface, every variant is a separate SKU with its own data. Variant selection, availability indicators, and add-to-cart logic all operate on SKUs. Composable architectures expose SKU-level operations through inventory and pricing APIs, while PIM and search services handle the product-level grouping that customers see.