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Top 10 Tips for Creating Great Product Codes

You've got a collection of new products that you're keen to enter into your inventory management system. These products may also be listed through other channels, such as your eCommerce store, or linked to your point-of-sale in your bricks and mortar shop. You may be wondering what will be the best way to track these items is - how many of each size and colour are in the store or warehouse?

If you're not familiar with what a SKU (Stock Keeping Unit) is, read on.

Why do SKUs matter?

Good product codes (often referred to as SKUs) are key to maintaining accurate stock control within your business and ensures that your staff can find and sell the correct product. A well considered alphanumeric SKU is generally more memorable than a barcode, which is a long string of numbers that is not unique to your business.

Consistent format and length across your SKUs helps with product segmentation, makes your invoices look neat and professional, and means customers can re-order the same product easily by quoting a product code unique to your store. Clever abbreviating of product details in an alphanumeric code means it is easy to add new products to your system in the future if a supplier expands their range.

In this blog, we will explore some of our top tips and tricks for creating meaningful product codes.

1. Product codes must not start with 0! When you import product lists into your new inventory system, you will usually be asked to upload a Microsoft Excel CSV file (.csv). Microsoft Excel drops the leading 0 on any number that starts with 0 e.g. "0512" becomes "512", meaning the product code has changed and is no longer accurate.

2. Keep it short and sweet, but not too short! We recommend using SKUs that are a minimum of 4 characters (for smaller inventories) and a maximum of 12 characters. Longer product codes are harder to print out on product labels and may get split onto two lines on an invoice. A SKU of 1-3 digits may be mistaken for a quantity value.

3. Try not to use your supplier's product code as your product code. If the supplier changes their product code in the future, you will be left with a number that does not have any meaning to your organisation and it will make reordering more difficult with both your suppliers and customers. Create a SKU that is meaningful for you and your staff.

4. We recommend using uppercase letters, numbers and dashes (-) only in your product code. Special characters tend to cause issues when syncing products across multiple sales channels, and most often are not translated correctly in Microsoft Excel when exported to a spreadsheet. It is good practice to use both letters and numbers in a Product Code, as there can be no possible way that the value could accidentally be altered.

5. Consider using a few common letters as a prefix to categorise and group products. If we sell coffee, biscuits and tea:

  • All products in the "Coffee" group will start with "COF"

  • All products in the "Biscuits" group will start with "BIS"

  • All products in the "Tea" group will start with "TEA"

If we have 20 different flavours of biscuits, we can assign a sequential number to each different type of biscuit.



BIS-03 etc.

This also means if staff are looking up codes, it will be faster for them to find products within a certain group.

6. Use suffixes separated by dashes to identify product variants. Clever use of dashes can be used to denote product variants such as size or colour. If we've got a t-shirt, we might start with "TEE01" as the base part of the SKU. We then add a dash and a two-letter colour code:

TEE01-RD - A red t-shirt TEE01-BL - A blue t-shirt

Keep the colour code to two or three letters/numbers maximum where possible. These t-shirts come in 3 sizes, small, medium and large. We will add another dash and the size code:


Now we have all the codes generated for our six unique t-shirts.

7. Set up a product code naming convention, and stick to it! Using the example outlined in point 6, if in the future our supplier starts stocking yellow t-shirts in the design "TEE01", we can easily add "TEE01-YL" as a new SKU to keep the product code consistent with our existing products. If more than one staff member is responsible for product entry, ensure there is a checklist and instructions for the correct formatting of new product codes.

8. Make all your SKUs the same length. Following on from the last point, a great way of making our SKUs look more consistent is to make them the same length, and if we do use dashes in the SKUs, make sure these are in the same place:

TEE01-YL - a yellow T-shirt JUM01-BL - a blue jumper BEA02-PK - a pink beanie

9. Try not to use letters that could be mistaken for numbers, such as "O" and "I". This may result in products not being able to be found in the system, or incorrect product codes given out to customers.

10. Don't use letter or number sequences that could be mistaken for a date value. When exporting a product list to Microsoft Excel, SKU values such as "AUG-30" could be read as a date when opening the product file meaning this SKU may be unexpectedly changed to "30/08".

Using these tips to streamline your inventory catalogue can assist with:

  • Tracking stock levels more accurately

  • Easier reordering of stock

  • Making your sales and fulfilment processes more efficient

  • Improved assisting with customer enquiries and orders

  • Streamlining your invoices to look neat and professional

  • Adding new products in the future

Do you need assistance managing and automating the generation of your product codes? Please give us a call on 1300 44 20 38 or book an appointment today.

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