UPCs, SKUs, Styles and Other Numbers

Posted by Stuart Friedberg on Nov 13, 2009 at 6:00 am / Fulfillment, Operations / Trackback

In August, Kathleen wrote a series of entries on product numbers (1, 2, 3, 4). I am going to take that thread a bit further, focusing on the record keeping and relationship aspects of things.

First, I believe every size of every colorway is a distinct stock keeping unit (SKU) and requires a distinct uniform product code (UPC). Not everybody agrees with the first part of that statement, but everyone should agree on the second part. Also, Forum members may remember some of this content from last year. I am recycling shamelessly. :-)

Style numbers are for people, primarily you but also buyers. UPC and SKU numbers are mostly for computers. One product will have several numbers assigned to it and you need to keep track of them.

Style numbers are yours and can be whatever works for you. There are lots of recommendations from Kathleen and forum members on how to manage them, which I won’t repeat here. Style numbers should have some structure to them. That is, various ranges of numbers tell you something about what the style is. You may also add extensions to a style number to identify colorway, but you almost certainly won’t add an extension to identify size. [That's industry convention, not a technical requirement.]

SKUs are for computers, not people, and don’t need any structure. The SKUs for all the sizes and colors of a given style don’t even have to be consecutive numbers. They just have to be unique: one distinct number for one distinct product. You can just assign them one at a time, not leaving any “gaps” or reserving any ranges to mean anything in particular. And since you only get 5 digits to play with in one important situation, you probably should use them all “tightly”.

Every element of the distribution chain, from retailers through distributors and warehouses all the way back to you, has a need for SKUs. In principle, every step along the way has its own set of SKUs for the products it handles. Large retailers and distributors may insist that you label boxes of your product with their proprietary SKUs. Other organizations may be happy to use the source plus the source’s SKU to identify a product. Sometimes you are the source. This is why there is room for disagreement about whether every size requires a different SKU; different organizations have different needs.

This tells us several things. You don’t completely own the SKU numbering of your products. Different organizations may have different SKUs for the same product. You may need to keep track of multiple SKUs for one product, together with which organization uses each one.

The UPC is effectively a single global system of SKU numbers, where all products from all sources can be given a unique number. Part of the number, assigned by a common registry organization, identifies the source. The rest of the number is assigned by the source to identify the product. Retail products for most industries already have UPCs assigned. Sewn products are a bit of an exception, but I would expect UPCs to become mandatory eventually.

If a large retailer assigns SKUs to your products, they own those numbers and they are whatever is convenient to the retailer. If you assign SKUs to your products, you own those numbers and they can be whatever you find convenient. Because you only have five digits to play with in a UPC, it might be wise to limit yourself to five digit SKU numbers so you can use them directly in a UPC.

Suppose your first style number is 20010 and you make it in four colorways or prints (but only one size). You might have extended style numbers 20010-01, 20010-05, 20010-10 and 20010-12. But you would assign the first four available SKU numbers (say, 1, 2, 3, and 4). If you managed to sell two of the colorways to a large retailer with their own SKU system, you would also use the next available numbers in that retailer’s SKU system. These specific SKU numbers would almost certainly be given to you by the retailer.

Your next successful style is 10010, and you make it in two colorways. You would assign the next available SKU numbers (say, 5 and 6).

Your product likely has sizes as well as colorways, so the number of SKU numbers you need grows dramatically. Take the first example with four colorways but this time with six sizes. Now you need 24 SKUs instead of four. You have one style number, four extended style numbers, and 24 SKUs to keep track of.

You will need to translate between style numbers and SKU and UPC numbers, in either direction. You need a database of some kind to keep track of this. Now, you don’t need a big database. You can do this in a spreadsheet, or a text file, or even a hard copy ledger book (although computer files are easier to search, make backup copies of, and import into production management software when your company gets bigger later on). One important point is that the database is cumulative. When you add a new style, it goes in the database. When you retire the style, it stays in the database.

Let’s take a look at what the columns in the table might look like. Start with the features that define a unique product. In most cases that will be

style, colorway, size

In database terms, that is the key to your product table. In a spreadsheet or ledger, that’s what you would write in the first three columns. Each SKU is assigned by some organization, and SKU numbers only make sense when you know who the assigner is. So you could add two columns to your table so it looks like

style, colorway, size, assigner, SKU

If you are keeping this manually, it will probably be most convenient to keep a separate notebook for each assigner. If so, leave out the assigner column because every row in the notebook would say the same thing. Don’t use a different column in a single table for each assigner. That will make importing your data into a proper database much harder later on. Put only one SKU assignment on each row if you use a single table. Use a different sheet (or notebook) per assigner if you don’t want them all in a single table. If you are using a database or even a basic spreadsheet, there is no reason not to keep all this in a single table or sheet because you can sort and search on any column(s).

It’s extremely unlikely that every organization that assigns SKUs to your products will assign a SKU to every product you make. They aren’t going to handle everything you make, and have no interest in numbering things they won’t handle. You simply don’t record anything when there is no assignment. And if you land a new large retailer with their own new set of SKU assignments, start a new notebook or just add the new entries to your single table.

Before we move on, don’t forget that you count as an assigner if you make up your own SKUs. And if your house SKUs aren’t the same as the your half of your UPCs, you actually count as two separate assigners with two separate lists.

Here’s something else you might want to plan for. Suppose you are fortunate enough to market the same product in a couple of different countries. Everything is the same, except that the labels you have inserted are different for the two national markets. You may not want to call that out as two styles, but you need to distinguish the products! So, you might want to extend your product key with another column to

style, colorway, size, other_distinguishing_feature

You can leave that column empty if there isn’t any reason to “split” a particular style. [You could also solve that particular problem by treating the label as part of the colorway and inventing new colorway numbers for each new national market.]

While this database doesn’t need to be elaborate, it does need to be reliable. This information is a necessary part of your company’s operations. So make regular backup copies of that spreadsheet or text file, and keep the backups someplace where a single fire or other disaster won’t wipe out the original and the backup. [If it's a hard copy ledger, that means writing it down twice or using a copy machine. Really.] That may not seem important if you have a couple of styles and a handful of UPCs. In five years you may have accumulated 25 styles, a couple of hundred UPCs, and 75 SKUs assigned by some large retailer, and you are already well past the point where you could reconstruct this from memory. In ten years, it may be 100 styles (include many that didn’t make it past market), well over a thousand UPCs, and three different sets of SKUs assigned by other parties.

If your line becomes very successful, you may find yourself having to reuse UPC numbers (after a four-year fallow period), or even a few style numbers (although I would try hard to avoid this), for different purposes. So your database should include a column saying when a particular style number and UPC number were associated with one another. And to make sure a sufficient fallow period can be left, you should probably include an additional column saying when the SKU or UPC (as used for that particular style) was retired. So we can extend the table to this

style, colorway, size, assigner, SKU, introduced_data, retired_date

There should be a similar, much smaller table to keep track of your style numbers, something like

style, introduced_date, retired_date

In 50 years, when the company historian wants to trace the humble beginnings of the enterprise, this table will document the development of your product line. You might want to add a description or even an illustration column to this table.

This is all just a small part of a full set of operational data. But I’ve gone on for long enough today.

3 Responses to “UPCs, SKUs, Styles and Other Numbers”

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Marlene
November 13th, 2009
9:36 AM

Lot’s of information! Will print it out and read it again, just as I have all of Kathleen’s entries.
Thank you Stuart.

David S
November 13th, 2009
11:22 AM

It’s important to remember there needn’t be a one-to-one correspondence with SKU and UPC. Say you sell a package that consists of a display rack, signage, promotional material, and an assortment of your products. (you see this sort of thing all the time in retail, if you look for it.) You need a SKU for it, but you’re not likely to need a UPC for it. And if that’s the only way to get the products (not usual, but it does happen) you’d need UPCs fro the individual products, but you wouldn’t need SKUs fro them. If they’re individually reorderable, or available separately, you do.

Dawn B
November 14th, 2009
10:27 AM

Thank you for a very helpful article. Don’t need the info yet…but good to have an idea of how to set things up right from the beginning.

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