online store and retail

Seller SKU on Amazon: All you need to know about Amazon SKUs

Many small businesses choose to start selling on Amazon Seller Central because it boasts a wraparound solution for e-commerce and supply chain management. While it is true that Amazon provides end-to-end services for its sellers, businesses that are new to the game often find themselves drowning in a sea of new terminology and jargon. Examples of confusing abbreviations include:

  • Stock Keeping Unit (SKU)
  • Amazon Standard Identification Number (ASIN)
  • European Article Number (EAN)
  • Universal Product Code (UPC)—also referred to as the UPC code

This blog demystifies Amazon SKUs and provides clarity around what they are used for and what to consider when creating them. Keep reading to gain a better understanding of Amazon SKUs and how to use them, so you can become a more effective and organized Amazon seller. Or, use the links below to go directly to a specific section.

What is a seller SKU on Amazon?

Developed for inventory management in warehouses, SKUs refer to unique alpha-numeric codes assigned to each of your products and their variants. A SKU can consist of any combination of letters and numbers that you choose, just as long as the system is consistent and used for all the products in your inventory. SKUs are used in both traditional retail—where they are scanned as a barcode—and e-commerce settings, where they are assigned to a product in the system.

Note that SKUs and UPCs are separate codes. SKUs are different from UPCs in that SKUs are used for internal purposes, while UPCs are used for external purposes.

An Amazon seller SKU follows the same principle but limits each SKU to under 40 characters. All products sold on Amazon are required to have SKUs that you can either generate or have Amazon generate for you. Amazon SKUs are meant to help sellers keep track of their merchandise.

What’s the difference between an Amazon seller SKU and FNSKU?

An Amazon Fulfillment Network Stock Keeping Unit, or Amazon FNSKU, is used for products that are shipped through Fulfillment by Amazon—also known as Amazon FBA. This unique SKU is used during the fulfillment process to ensure that your product is attributed to your business. Since Amazon manages so many products—and even many that may be the same as yours—this is an essential step to making sure you get the income you’re due from sales on the platform. This one simple step makes it easier for Amazon, and it provides you with reassurance that you get credit once it’s sold—it’s a win-win.

If you use Amazon FBA, an FNSKU will be assigned to your product. You’ll need to make sure that this number is added to the shipping label before it’s sent to one of Amazon’s fulfillment centers.

Business owner sitting at his desk scanning a barcode on a package with his phone.

What should you include in an Amazon SKU?

As a rule of thumb, all SKUs should contain information that helps you:

  • Effectively categorize products by color, size, and type
  • Quickly pick, pack, and ship products from the warehouse
  • Manage inventory that is being sold across multiple channels

To include as much product information as possible when creating your Amazon SKUs, consider including identifiers such as:

  • Product identifier
  • Model/style identifier
  • Color identifier

Keep in mind that Amazon SKUs won’t be the only SKUs your business will be dealing with for products. To help maintain consistency and organization for inventory and order tracking, it may be wise to also add an identifier for where the product is being sold. In this case, that would mean adding an indication for Amazon marketplace, such as “AM.”

The same SKU format should be used for all new products moving forward.

Amazon SKU example

Let’s say you’re selling necklaces as part of your Amazon product offering. Here are some examples of what well-designed Amazon SKUs would look like for these products:

  • Looped necklace gold, model no. 1=LN-01-G
  • Looped necklace silver, model no. 1=LN-01-S
  • Looped necklace bronze, model no. 1=LN-01-B

To indicate that it’s being sold on Amazon, you may want to also add “AM” to the beginning or end of the SKU, which would result in an SKU like LN-01-G-AM.

In the example, we have used the color variant, which distinguishes the items, as the last value in the SKU. By suffixing the SKU with the color variant, we make the SKU easy to comprehend while still grouping together all the looped necklaces with “LN” for easy identification.

Should I create my own SKUs or let Amazon do it?

Most small business merchants selling on Amazon recommend creating your own SKUs for product listings as a matter of best practice. Let’s consider some of the disadvantages of letting Amazon generate SKUs for you, versus creating them on your own.

Amazon-generated SKUs:

  • If you are selling the same products on two different Amazon stores, Amazon will assign different SKUs to those products. So, on one store the SKU for a small blue t-shirt could be ST-21-GRO-5, and the same product on another store could be XY-52-ZTW-06. Keeping track of the number of units sold across channels then becomes challenging.
  • Amazon-generated SKUs will be meaningless to you and your team and therefore hard to recall especially as your inventory grows. One of the benefits of having SKUs is that it provides a quick way to search for products—long meaningless codes detract from that purpose.

Generating your own SKUs:

  • You can easily group together items that are selling well.
  • You can create a comprehensive product identification system that includes type of product, size, color, and even which collection the item belongs to, so that you are able to identify the product with a single glance. For example, the SKU for a small red floral t-shirt from your summer 2019 catalog could be S19T-FLO-RS. An added benefit of designing an SKU system this way is that it is easily expandable.
  • You can standardize your sales reporting across channels for greater visibility into sales by season, channel, and product.

While there are many obvious upsides to creating your own SKUs, doing so for a large number of products is tedious work for new sellers. One way to simplify the process is to use tools such as QuickBooks Commerce, which can generate SKUs for your entire product catalog. This makes stock availability easy to determine and searching for products simple. Plus, it can help you easily identify your most profitable products when you run reports in the future.

Note: If you’re new to selling on Amazon or e-commerce in general, take the time to learn more about your fill rate and filing taxes, in addition to optimizing your SKUs.

Simplify selling on Amazon with QuickBooks Commerce

Whether you’re starting with Amazon Seller Central or you’re already successfully selling on other e-commerce platforms, you should make sure your SKUs are in order. Assigning clear and easily identifiable SKUs for your products is the first step to proper inventory management on Amazon. However, even with well-thought-out SKU numbers, keeping track of orders and stock availability can become painstaking and complicated work that takes up many hours in a day.

QuickBooks Commerce integrates with Amazon Seller Central as well as many other e-commerce channels. This inventory management solution provides small, fast-growing businesses with a single, easy-to-use platform to manage stock movements, sales orders, warehousing, shipping, and even accounting with QuickBooks Online integration. Investing in an inventory management tool as early on in the process as possible can help you save time and money and let you focus on building a successful business.

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