What is SKU | Benefits, How to Use, Purpose, Full-Form of SKU?

SKU

Contents:

1. What is SKU?
2. What is the Full-Form of SKU?
3. Why SKU is necessary?
4. How do you create a SKU code?
5. How is SKU calculated?
6. How many digits is a SKU number?
7. What is an SKU used for?
8. Where are SKU Codes used?
9. What is the purpose of a SKU?

What is SKU?

The full form of SKU, Stock Keeping Unit is a scannable bar code that is printed behind almost every retail product. 

• Stock Keeping Unit (SKU) is based on an alphanumeric combination that helps the retailers obtain all the product details including the prices and manufacturing details. They are usually used by the vendors to keep track of the sale & warranties of the product.
• A stock keeping unit is defined as a set of letters and numbers assigned to a vendor's product. Generally, SKUs have letter and number abbreviations that distinguish one product from another. For example, features such as manufacturer, specification, model, material, size, color, packaging, and warranty terms. Letters and numbers can be read by employees or displayed as scanned barcodes.
• In other words, SKU Code is a unique code issued by companies to identify unique products in a database. A retailer can have his own SKU codes applied to his inventory system. 

What is the Full-Form of SKU?

SKU stands for Stock Keeping Unit

Why SKU is necessary?

SKU is an important graphic differentiation of the product. Using the SKU code, one can easily identify the product in the system. It helps keep track of the inventory and gives uniqueness to every item.

1. For Optimizing Inventory Errors: Inventory Management Errors are one of the biggest causes of losses in retail businesses. SKU Codes eliminates it by keeping track of inventory at each of your locations. Sometimes it becomes tough with the more products you have to track and the more locations you have. With the help of SKU Codes through a largely automated process, you will be able to make smarter stock management decisions. You’ll end up losing fewer products, have a more reliable stock in each of your locations, and be less likely to make a bad development call.
2. For Inventory Sharing across multiple platforms: With unique SKU Codes, you can share your inventory across all of your online stores, which means your available inventory will constantly be updated, in real-time. You can share your inventory across all sales channels (Retail stores, shopping carts, marketplaces, etc), so there is no need to reserve inventory for just one. This means more sales opportunities for you, and more accuracy across all platforms.
3. For Inventory Tracking: Storehouse managers and Store retailers will find it much easier to track down individual items. This can greatly increase your speed and profitability.
4. For Increased Productivity: SKU Codes can help you learn which products are being bought most frequently (and how). This information can be used to create targeted advertising. They can also improve your in-store experience since you’ll be able to locate in-store items faster or order them from the correct locations.
5. For Time Saving Tool: SKU Codes help retailers as well as customers by saving their time to find products quickly.
6. For Reduced out of the stock situation: It helps retailers to know which products are most in-demand and which products are going to be out of stock soon.  It always reminds you to update the inventory before it runs out of stock.
7. For Fast & Accurate Service:  Once your customer places an order, the shipment needs to go out quickly. In this Online Shopping world, customers have very little patience when it feels like their order is taking too long to be shipped. Many warehouses struggle to keep up with the pace of their customer expectations. SKUs can help warehouses find what they need even more efficiently. They allow workers to find the exact product that they need with both speed and accuracy, which is required to keep up with customer demand.
8. For Creating Better Suggestions: You can use SKUs to recognize product characteristics that help your sales team identify additional items that your customer might want. They could also suggest alternatives when what your customer wants isn’t available. They can help give you valuable insight into the particular type of item that they want and help you quickly identify alternatives that will keep them happy. This can also be done online too. Most online stores offer suggestions for additional items of your choice as a complement or alternative to the item you're looking for. This is typically done by applying an algorithm to the retailer’s SKUs to come up with similar items.

How do you create a SKU code?

Some vendors believe in creating their own SKU codes, while some use the same as provided by their suppliers. While using an old one might be facile, creating a new one would help you standardize better. Here are the steps of creating an SKU code:

• Identify the Unique Features: The first thing you need to do is identify the unique features of the product, and choose the information you would like to obtain from the SKU. For example, the brand SkullCandy is vital information, followed by the product type, model, and color. The year of manufacturing may be extraneous information. So, you need to segregate the info you want v/s the futile information.
• The Cascade Method: Make a logically intelligible code. Now you may have different brands of Headphones. SKC for SkullCandy, followed by it is for iPhone which means you can add "i", then the model number given by the vendor is 423, you add the same.

You keep adding such attributes until you have a unique identification code. When you spate each attribute with a "-", you might get something like:

"SKC-I423-PINK"

• Things To Keep in Mind: While you are creating an SKU code, you need to keep a few things in mind like, the code has to be unique, it should be short, avoid special characters, and be careful with confusing numbers and letters(O & 0 and I & L). Also, make sure you do not use the same code for 2 separate brands.

How is SKU calculated?

The significance of SKU is clear, and if you choose this method to keep track of your inventory, you need to have an empirical SKU management system. It will help you analyze the cost carrying of each product, which will assist you in keeping a track of how every product is contributing to the financial objective of the business. It helps you to optimize your inventory level and purchasing. Here is how you can calculate different aspects of SKU manually:

• SKU Ratio: Make a list of all the SKUs in an excel, against it write down the selling cost, followed by the purchase cost, which means you will have 3 columns. Calculate the gross profit of each SKU(Selling Cost- Purchase Cost). Now make gross profit ranges in the next tab (Less than $10, $10 to 20.99$, 21$ to $29.90, and so on). Make a note of how many SKUs fall under each range. Divide the number of SKUs in a range by the total number of SKUs, and multiply that with 100. The answer you get is your SKU ratio.
• Sales Ratio: List down the gross profit ranges you had, and against it note down the number of units sold in a given period. Divide the number of units sold in each gross profit range by the total units sold and multiply it by 100. The answer you get is your sales ratio.
• Analyzing: In a new excel sheet, compare the SKU ratio and Sales ratio of each gross profit range. If the sales ratio is higher than the SKU ratio, the product has a higher demand. And if the SKU ratio is higher than the sales ratio, you might want to reconsider their sale as they are trounced.

How many digits is a SKU number?

When it comes to building SKUs, there is no universal system. The SKU code can be any length, but the standard practice is to keep it short between 8-12 alphanumeric characters. It usually refers to product information and is unique to each company. LIKE => "SKC-I423-PINK"

OR

As stated above, an ideal (Stock Keeping Unit) SKU number is supposed to be alphanumeric and should be idiosyncratic and short. Whereas, the length of an SKU code by anything you wish to, an exemplary code is made up of 8 alpha-numeric digits. LIKE => "SKC-I423-PINK"

What is an SKU used for?

You may just create an SKU code, but do you know how it can be helpful? This is how you can use the SKU codes to your gain:

1. Accurate Inventory Tracking: The main objective of having an SKU code is to keep a close track of the availability of your inventory.
2. Determine Profit: Using your SKU data, you can trace out the profit and loss for each product effortlessly.
3. Forecast Sales: When you keep a close eye on the explicit inventory numbers, these codes help you augur the sales of an item. You can do it, only if you implement the management system thoroughly.
4. Boosting Customer Loyalty: This is not a very popular use of SKU codes, but the architecture of these codes can be used to prognosticate the reorder points. This makes it easier for you to find the product your customer wishes to purchase, which makes their shopping experience better.
5. New Suggestions & Customer Retention: If the product us out of stock, your customers would know it right away, and the sooner you tell them, the chances are they will be willing to wait for the stock than go elsewhere. You can even offer them a similar product without wasting any time, which is highly valued by them.

Where are SKU Codes used?

1. Warehouses
2. Retail Stores
3. Online Marketplaces such as Amazon, Flipkart, Snapdeal, etc.
4. Product fulfillment centers
5. Etailers

What is the purpose of a SKU?

The main purpose of creating an SKU code for your product is to give it a distinctive identity. It will help the store keep track of the inventory. When you trace an SKU code into the system, it tells you all the product details associated to the code, the number of pieces you purchased, the number of pieces you sold, the number of the piece left in stock, the name of the supplier, and about the available variants. This makes it easy for the store owners to restocking, as well as in guiding the customers, saving their time. This succors to keep your business books in order and keep them updated.

Another purpose of having SKU codes is that they reduce the risk of errors. While your product name could be lengthy and have myriad variants, it may be difficult to remember all of them which may cause communication errors. SKU codes help eliminate them. 

Moreover, while the marketing team and sales team will always have differences in the big bet products, the SKU codes assist them with the best selling products based on past sale analysis and this helps bring everyone on the same page.

While one may understand that SKU codes can only be used in stores, you will be surprised to know that they can also be used in warehouses, catalogs, retail stores, and even by product fulfillment centers.

People also search for FYI, NOC, CV, POC, etc.

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Definition of GDP | What, Types, Calculation, Pros&Cons, Full Form of GDP?

GDP

Content:

1. History of GDP
2. What is GDP?
3. What is the full form of GDP?
4. What are the types of GDP?
5. How to calculate GDP?
6. GDP on a production basis
7. GDP based on income
8. What are the Pros and Cons of GDP?
9. Criticisms of GDP
10. What are the Limitations of GDP?

History of GDP

The primary basic construct of gross domestic product was projected by William Petty in the middle of the seventeenth century that was a great deal of change by Charles Davenant towards the very best of the seventeenth century. the fashionable construct of gross domestic product was developed by the economic expert Simon Kuznets in 1934 and was adopted as a result of the foremost supply of life of a rustic economy at the Bretton Woods conference in 1944. gross domestic product replaced worth (Gross National Product) that was, at that point, the measured production of a rustic economy.

What is GDP?

Gross Domestic Product (GDP) is the total monetary or market value of all goods and services produced within the country's borders. As a comprehensive measure of gross domestic product, it serves as a comprehensive scorecard of the country's economic health.

GDP is generally calculated on an annual basis, but can also be calculated on a quarterly basis. In the United States, for example, the government issues annual GDP estimates every quarter and every year. Most personal data sets are also given realistically, meaning that the data is adjusted for price changes and hence a mesh of inflation.

Key Points:

• Gross Domestic Product (GDP) is the monetary value of all finished goods and services done in the country over a period of time.

• GDP provides a country's economic snapshot, used to estimate the size and growth rate of the economy.

• GDP can be calculated in three ways using cost, product, or income. It can be adjusted to provide deeper insights into inflation and population.

• Despite its limitations, GDP is an important tool to guide policy-makers, investors, and businesses in making strategic decisions.

What is the full form of GDP?

GDP stands for Gross Domestic Product

What are the types of GDP?

There are several types of GDP measurement:

• Real Gross Domestic Product- Real GDP takes into account the effects of inflation and allows the comparison of economic output from one year to another and at other times.
• Nominal Gross Domestic Product- Nominal GDP is a measure of raw data.
• Gross National Product (GNP)- Gross national product is the value of the final product produced by factors of production domestically, where production is done.
• Net Gross Domestic Product- NGDP after depreciation has been taken into account.

How to calculate GDP?

The following equation use for calculate GDP:

GDP = I + C + G + (X-M)

It can also be expressed as GDP = 

• I = gross investment
• C = private consumption
• G = government investment
• (X-M) = government spending (export-import)

Economists determine GDP in three ways; In all these ways we must give the same result. They are production (or output or value-added), revenue, or costing.

The most direct of these three is the production process, which provides the product of each section of the company as a whole. The cost mechanism works on the principle that all products should be purchased. So the total product value should be equal to the total cost of the people buying the goods. The production process works on the principle that the income of producer factors must be equal to their product value and that GDP is determined by obtaining all producer income.

GDP on a production basis

The production process is somewhat like the reverse of the cost mechanism. Instead of measuring the input costs associated with economic activity, the production process measures the total value of the financial product and subtracts the cost of intermediate goods consumed in the process, such as materials and services. Cost policy drives projects beyond costs; The production outlook is lagging behind the conditions of full economic activity.

GDP based on income

If the cost of spending is income on the other side of the coin, and your cost is someone else's income, then another way to calculate GDP - the intermediary between the two other policies - is the income mechanism. The economic system consists of labor in earnings through all the factors of production, rent earned by land, return on capital in the form of interest, and corporate profits.

Income adjustment factors in some adjustments to certain items not reflected in these payments made for production factors. For one, there are some taxes that are classified as indirect business taxes - sales taxes and property taxes. In addition, depreciation, which is a reserve that differentiates businesses from replacing worn-out equipment, can also add to national income. All of this includes national income, which is used as an indicator of self-production and selfish spending.

What are the Pros and Cons of GDP?

Pros

• A broad indicator of growth
• It is easy to measure the increase (growth) in percentage
• It is easy to compare yourself and other countries
• This is the cardinal ranking, which means we can compare the two countries by saying that they are two or half of each other.
• Cheap and easy to assemble
• It is calculated from the formula used by all countries, so it is a reliable index.
• It is a good way for governments to know whether or not economic policies are successful.
• It can be divided into GDP per capita, which is calculated by calculating the country's population.

Cons

• These are narrow indicators that fail to show the quality of life, standard of living, happiness, health care, political freedom, unemployment, and the quality of goods and services.
• GDP is not the cause of inequality: very wealthy businessmen can increase the country's GDP, although the majority of the country may be backward and in poverty.
• Examples of uneven distribution of wealth in China and Brazil, these countries have high GDP but high inequality.
• It is not responsible for the environmental impacts of economic policies.
• This does not include informal sector activities or 'block' market activity.
• Foreign income was not taken into account
• High inflation may be behind a higher GDP rate
• The country may be over-productive but unable to buy goods, e.g. China makes many iPhones, but most people who live there can't afford them
• The government can adjust the data to gain power
• The manufacturing process may be immoral, with high GDP trading up to drugs or guns.
• It measures growth in the past and is never relevant or measures future growth.
• GDP is also misleading in terms of the country's high population, as a large number of people engage in economic activities in a highly populated country.

Criticisms of GDP

In fact, there are drawbacks to using GDP as an indicator. In addition to the lack of timeliness, there are some criticisms of GDP as a measure:

• This is not the case for most informal sources of income - GDP is based on official statistics, so it does not take into account the extent of informal economic activity. GDP has failed to determine the value of under-table employment, black market activity, voluntary work, and domestic production, which may be important in some countries.
• It is geographically limited in the global open economy - GDP does not take into account the profits earned by foreign companies in a country where foreign investors are repatriated. It can beat the country’s real economic output. For example, Ireland's GDP of $ 210.3 billion and GNP of $ 164.6 billion in 2012, compared to $ 45.7 billion (or 21.7% of GDP), have been attributed to the repatriation of profits to Ireland's foreign companies.
• It emphasizes material production without considering the overall welfare - GDP growth does not measure the growth of a country or the well-being of its citizens, as noted above. For example, a country may experience rapid GDP growth, but it can bring significant costs to society in terms of environmental impact and increased income inequality.
• It ignores business-to-business activity - GDP only considers final commodity production and new capital investment and deliberately eliminates intermediate costs and transactions between businesses. By doing so, GDP eliminates the importance of consumption in relation to production in the economy and is less sensitive to economic fluctuations than business-to-business metrics.

What are the Limitations of GDP?

Simon Simon Kuznets, the economic expert UN agency developed the first comprehensive set of measures valuable, declared in his 1st report back to the Congress in 1934, throughout an area titled "Uses and Abuses of value Measurements"

The valuable capability of the human mind to alter associate aesthetic scenarios throughout a compact characterization becomes dangerous once not controlled in terms of positively declared criteria. With quantitative measurements particularly, the determinateness of the result suggests, typically deceivingly, an exactitude and ease among the outlines of the issue measured. Measurements valuable square measure subject to the current variety of illusion and ensuing abuse, particularly since the matter that square measure the center of conflict of opposing social teams wherever the effectiveness of an argument is sometimes contingent upon oversimplification.

All these qualifications upon estimates helpful as an associate index of productivity square measure while necessary once financial gain measurement square measure taken from the aim of reading of economic welfare. However, among the latter case, further difficulties are becoming to be recommended to anyone UN agency desires to penetrate below the surface of total figures and market values. Economic welfare cannot be adequately measured unless the non-public distribution of financial gain is understood and no financial gain measuring undertakes to estimate the reverse aspect of financial gain, that is, the intensity and unpleasantness of effort going into the earning of financial gain. The welfare of a nation will, therefore, scarcely be inferred from a measuring valuable as outlined on top of.

People also search for SKU, NaVIC, GPS, ATM, DP, etc.