inventory sku system

Why You’ll Love an Inventory SKU System

Keeping inventory under control in a growing antiques business is a matter of “scaling.” Many dealers start with a garage full of items they have collected, and begin by selling at an antique mall or show. As they grow, they may move to a free-standing retail location or sell online. As inventory, customer base and selling platforms increase in number, it becomes progressively harder to keep track of what’s being sold to whom, and where to find an item when it’s needed. Starting one’s business with a scalable inventory plan reduces problems and makes growth easier.

I recently heard a vintage vinyl dealer lament: “I can spend 10 or 15 minutes looking for a particular album that I just sold online. I’ve organized by genre, alphabetically by artist and/or album name, and type of media but nothing seems to work. When I buy a large lot, I find myself re-shuffling everything on the shelves to keep everything in order, but I lose track of where I put things and how I categorized an item. Is Sam Smith a blues singer or a soul singer? Where do I put Patti Smith? Or Will Smith? I can’t make any money if I spend all my time looking for inventory items.”

Some dealers don’t have that complication and never will. If, in your operation, a customer picks a one-off item from a shelf and takes it to your checkout, you’re done with that item. But if you add locations or begin to stock pieces in multiples, you will soon find yourself with this dilemma.

Save time with a SKU system

The solution to inventory tracking is to develop a SKU (skew), or Stock Keeping Unit, system. Don’t confuse a SKU system with a barcode. Barcodes are universal, and are the same no matter where a product is sold. SKUs are internal and apply only to your company. Neither is a SKU to be confused with an inventory number. Inventory numbers are unique identifiers of a product. SKUs tell you the location of an item in your warehouse, not what the item is. You can design them to provide whatever information you want. SKUs apply only to warehoused items, since store inventory should be moved about and re-displayed regularly. An effective SKU system is critical for online sellers.
Let’s see how a SKU system might help our friend, the vintage vinyl dealer:

With a SKU system, each warehoused item is marked with a unique number that describes its location. The number can be written on a card-stock label attached with tape to the storage sleeve, aligned so that it sticks out past the record’s edge. That way, labels can be “flipped through” without pulling each record out from shelf to see what it is. The “unique number” is referenced on your inventory sheet so that an item may be easily found when it’s sold.

How is a SKU number created? Imagine that your storage area has 20 storage shelf units, each with five shelves, for a total of 100 shelves. The unit on the far left will be named “A”, the next one to the right “B”, and so on through “T”. The topmost shelf on unit A is shelf #A1, the second #A2, and so-on through #A5. Repeat the process with shelf units B through T. (Note: this system only applies to your own storage area. If you use Amazon or another fulfillment warehouse, you must use their SKU system.)

Why not just name the shelves 1-100, instead of designating the units themselves? Because if you move the units around you’ll have to start over. If you designate which shelf unit an item is in, you can move it wherever you like and still find your inventory.

The first record album on the left of shelf 1, unit A will be record number A11. Whatever you do, keep the numbering sequential. If you have 156 records on shelf #1, your SKU numbers will progress from A11 to A1156. On shelf A2, you start over with A21. If shelf A2 contains single albums plus box sets, you may have 87 items on that shelf, so your numbers will run from A21 through A286. Continue numbering in this fashion through all your shelf units.

When you buy new inventory, just place the item in an available spot and assign a SKU that indicates the storage position. (Some advisers insist that SKU numbers should never be re-used; I disagree with this. For small retailers, the goal is to make items easy to find, not complicate the book-keeping.) Storing inventory in this fashion eliminates re-shuffling items on the shelves and the confusion of organizing by category.

Now, when you get a “sold, ship now” notice from eBay, if the item’s SKU number is L325 you’ll know that the item can be found on unit L, third shelf down, 25th item from the left. If you save only a minute looking for each item, and you sell 60 items per day, you’ll save an hour each day and all the associated frustration of not being able to find an item. If you also save an hour a week re-shuffling and categorizing inventory, you’ll save nearly seven weeks annually of your own time, or seven weeks’ wages for an employee.

A few tips on creating SKUs:

  • Always begin a SKU with a letter. Letters are easier to discern and will reduce errors.
  • Always use letters and numbers together, not just one or the other. Double-up on letters if needed.
  • Never begin a SKU with a zero.
  • Don’t use characters such as “/” (backslash), “<”, “>” (less than/greater than) or other characters that might confuse people or software. In Excel, some of these characters convey operating instructions to the program and will certainly make a mess of your SKU system.
  • Keep SKU numbers simple and short.Don’t try to add descriptive codes to your SKU. SKUs are for finding and sorting, not for describing.
  • Save the descriptions for your inventory list.

There’s no question that using a SKU system will save you time and money; money that will show up immediately on your bottom line. If you’re not already using a SKU system, what are you waiting for?

The delay is costing you!

This article originally appeared in Antique Trader Magazine

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