How to Create SKU Numbers for Products: A Format That Scales

A SKU (stock keeping unit) is your own code for one sellable variant. Build it from three or four product attributes in a fixed order, keep it short, use only letters, numbers and hyphens, and never reuse a code. That is the whole method. The rest of this page is how to apply it without painting yourself into a corner.

SKU, UPC and GTIN are different things

A SKU is internal. You make it up, and it only has to mean something inside your business. GS1 US, which issues UPC barcodes in the United States, describes the difference this way: a SKU is an internal tracking code for a retailer, while a UPC identifies the product across the whole supply chain. Two shops can sell the same mug under the same UPC and completely different SKUs.

You need SKUs from your first product. Whether you need UPCs depends on where you sell, so check each channel’s listing rules.

Step 1: Choose the attributes that matter

Pick the attributes that change what a picker grabs off the shelf. For most stores that is:

• Category or product line (TS for T-shirt, MUG, CND for candle)
• Style or design (a short code or number)
• Color or scent
• Size or capacity

Leave out anything that changes without changing the product: price, supplier, season, warehouse location. If the supplier changes but the item is identical, the SKU should not change.

Step 2: Fix the order, most general first

Go from broad to specific so SKUs sort into sensible groups in any spreadsheet.

[CATEGORY]-[STYLE]-[COLOR]-[SIZE]

Worked example for an illustrative apparel shop:

Sort that table by SKU and every classic tee sits together, ordered by color, then size. That is the point.

Step 3: Keep it short and readable

Shopify’s guide to using SKUs to manage inventory suggests keeping SKUs to no more than 16 characters and notes that 4 to 8 characters can be enough for smaller catalogs. It also says any format works, as long as you stay consistent. Short codes are faster to read off a bin label and less likely to be mistyped.

Marketplaces set their own maximum lengths and allowed characters, so if you sell on Amazon, Etsy or TikTok Shop, check each listing template before you lock in a format. A code that fits the strictest channel works everywhere.

Step 4: Avoid the characters that cause trouble

Rules that save headaches later:

1. No spaces or special symbols. Shopify warns they can cause search problems. Stick to A to Z, 0 to 9 and hyphens.
2. Avoid letters that look like numbers. O and 0, I and 1 get confused on handwritten counts and printed labels. Shopify’s guide calls this out too.
3. Pick one case and stick to it. Shopify notes SKUs are case-sensitive when syncing, so “abc123” and “ABC123” count as different codes. Use uppercase everywhere.
4. Don’t start with zero. Spreadsheets strip leading zeros, so 00125 becomes 125 the moment someone opens the CSV.
5. Don’t encode things that change. Price, cost and supplier belong in columns, not in the code.

Step 5: Never reuse a SKU

When a product is discontinued, retire its SKU. If you reuse it for a new item, your sales history, return records and reorder data will mix two different products. Shopify’s guide says SKUs within the admin must be unique, and the same rule should apply across time.

For variants of returned or open-box stock, add a suffix rather than inventing a new pattern. TS-CLS-BLK-M-OB tells everyone it is the same tee, sold as open box. This pairs well with a graded returns process like the one in our ecommerce returns management guide.

Bundles and kits

Give each bundle its own SKU with a prefix such as KIT, and record which component SKUs it uses and how many of each:

KIT-TS3-BLK-M  =  3 x TS-CLS-BLK-M

Your inventory system or spreadsheet should deduct the components when the kit sells. If it can’t, count the kit as its own stock and assemble kits in batches.

A quick SKU checklist

• Format written down in one sentence, with a code list for each attribute
• Attributes ordered from general to specific
• 16 characters or fewer, uppercase, letters, numbers and hyphens only
• No O/0 or I/1 confusion, no leading zeros
• Every variant has its own code; no code is ever reused
• Suffix rule for open-box or refurbished stock
• Same SKU used on every sales channel and with your 3PL, if you use one (see our 3PL shortlist)

Write the format into a one-page document and share it with anyone who adds products. A SKU system only works if everyone builds codes the same way.