Stock Keeping Unit (SKU)

An SKU, short for Stock Keeping Unit, is a unique code for one sellable version of a product, like a specific size, flavour, and pack type. If you can order it separately, it is its own SKU.

Also known as: product variant, item code, SKU code.

What an SKU is

An SKU is one specific product variant that can sit in a warehouse, an order form, and a store shelf as its own line item. Think size, flavour, pack format, and sometimes region specific packaging.

That is why one brand is rarely “one product” in real life. The same brand can be ten, fifty, or five hundred SKUs once you count cans vs bottles, single packs vs multipacks, sugar free vs regular, and different flavours.

In FMCG, people use SKUs to keep the chaos manageable. If you do not speak SKU, assortment talks turn into “the blue one” arguments in five minutes.

Why SKUs matter in FMCG

• SKUs are the building blocks of assortment decisions, because you list and delist specific items, not vague product families.

• SKUs drive listings, because the retailer approval usually happens per item and pack, not per brand.

• SKUs make ordering possible, because buyers and stores need an exact item to replenish.

• SKUs show up in planograms, because facings and shelf positions are assigned to specific variants.

• SKUs are what pricing and promos apply to, because discounts, multipacks, and mechanic rules are set per item.

• SKUs keep reporting honest, because sales, distribution, and availability are tracked at item level.

• SKUs set execution priorities, because field teams cannot push everything, so cycles focus on a few must win items.

SKU vs product, and SKU vs barcode

A product is the broader concept, like “Pepsi Max” or “KitKat.” An SKU is the exact sellable version, like “Pepsi Max 330 ml can” or “KitKat 4 finger 41.5 g bar.”

A barcode, often called GTIN or EAN depending on market, is an identifier used for scanning at checkout and in logistics. It tells the system “this exact item,” fast.

An SKU is how the business groups, plans, and sells items in everyday work, in internal systems and retailer processes. Sometimes SKU and barcode are closely linked, but they are not the same thing.

A simple example

A chocolate brand has six SKUs, a single bar, a king size bar, and a few multipacks. On paper, it is “one brand,” but in store it is six separate items that need separate listing decisions, separate shelf spots, and often separate promo plans.

The retailer agrees to list only three of those SKUs, because shelf space is tight and the category is already crowded. The remaining SKUs are not “bad,” they are just not in that retailer’s assortment right now, so they cannot be ordered and they should not be pushed in visits.

In the planogram, facings are given to the listed SKUs only. The multipack gets more facings because it fits the retailer’s shopper mission and basket size better, while the single bar gets fewer facings but a reliable position.

When the next sales cycle starts, the commercial team chooses two priority SKUs to focus on, for example the multipack and the single bar. The field team then checks availability, placement, and promo execution for those specific SKUs, instead of having a vague “win the brand” conversation with no item level clarity.

Common mistakes

• People mix up SKUs and treat two similar packs as the same item, even when the size, flavour, or case pack is different.

• The naming is unclear, so the field cannot quickly tell which SKU is which when they are standing in front of the shelf.

• Teams keep too many low value variants in the range, so shelf space and execution time get wasted on items that do not really matter.

• The priorities are communicated poorly to the field, so reps and merchandisers push whatever they personally remember instead of the agreed focus SKUs.

• SKU lists in presentations and documents are outdated, so teams plan, sell, or report using items that have already been delisted or replaced.