SKU vs. barcode: not the same
The SKU (Stock Keeping Unit) is your internal code: you define it, you change it when needed, you use it for inventory management. The barcode (UPC/EAN/GTIN) is a global, registered identifier purchased from organizations like GS1 and used for POS scanning anywhere. A black Nike T-shirt size M has one EAN worldwide, but can have a different SKU at every retailer.
Recommended structure
The standard pattern for readable SKUs is CATEGORY-BRAND-ATTRIBUTE-SEQUENCE.
Example: TS-NIK-RD-M-0001 = "T-shirt, Nike, red, medium, first unit".
Benefit: just by reading the SKU, anyone with system knowledge knows the product.
Invaluable when your team grows past having full mental context.
Rules for sustainable SKUs
- Short but descriptive. 8-15 characters is recommended.
- Uppercase and dashes only. No spaces, slashes, quotes.
- No look-alike characters. Skip O vs 0, I vs 1 — they cause spreadsheet errors.
- Stable. Once assigned, don't change it — all your historical reports use it.
- Unique. Each variant (color, size) gets its own SKU. Never share across variants.
- No price embedded. Price changes; the SKU shouldn't drift. Keep them separate.
Categorization
Before generating SKUs, define your taxonomy: how do you group products? By family, by supplier, by sales channel? A bad taxonomy shows up at month 6 when SKUs no longer match the real shape of inventory. The first segment of the SKU should match the primary criterion of your business (category, in most cases).
Examples by industry
- Apparel:
SHI-LEV-BL-L-0042(Shirt, Levi's, Blue, Large, #42). - Electronics:
NB-DELL-INSP15-0007(Notebook, Dell, Inspiron 15, #7). - Grocery:
FOO-MOL-1KG-0123(Food, Molinos, 1kg, #123). - Beauty:
LIP-MAY-RD02-0009(Lipstick, Maybelline, Red 02, #9).
Common mistakes
- SKUs based on supplier code. Switch supplier and the system breaks.
- Reusing discontinued SKUs. Historical reports break.
- Too much hierarchy depth. 3-4 segments max. More and no one remembers them.
- Changing format mid-catalog. You end up with two logics living together; nobody knows which is which.