Commerce relies on numerous alphanumeric codes to manage the flow of goods, leading to frequent confusion among consumers and even business professionals regarding their purpose. While codes like the Stock Keeping Unit (SKU) and the Serial Number (SN) may look similar on a product label, they serve fundamentally different functions in the supply chain and post-sale environment. Understanding the precise role of each identifier is necessary to appreciate how inventory is managed, sold, and supported after purchase.
What is a Stock Keeping Unit (SKU)?
A Stock Keeping Unit (SKU) is an internal alphanumeric code created and used exclusively by a retailer or seller for inventory management purposes. This code is a tool for the business to categorize and track a group or type of product, such as all units of a specific model, size, and color combination. For example, every size 10, black, leather boot from a particular vendor would share the exact same SKU, regardless of how many individual pairs are in stock.
The structure of an SKU is entirely customizable to the needs of the business, allowing the company to embed specific product attributes like vendor, department, color, size, and location into the code itself. Retailers use SKUs to analyze sales velocity, determine when to reorder stock, and organize their warehouse or storefront shelving efficiently. Because the SKU is designed for internal logistics, it functions as a shorthand identifier for the product line rather than the individual item.
What is a Serial Number?
The Serial Number (SN) is a unique, sequential identifier assigned by the manufacturer to track a single, specific item from the moment it leaves the production line. Unlike the SKU, which represents a category of goods, the SN provides a distinct identity to one physical unit among many identical units. This code is the product’s individual record, following it through its entire lifecycle.
Manufacturers utilize the SN for rigorous quality control, linking the specific unit back to the exact production batch, factory, and date of assembly. Post-sale, the SN is the primary mechanism for validating customer warranties, processing repair claims, and managing product recalls effectively. For high-value items, the Serial Number is also logged by retailers to prevent theft and track the legitimate ownership history of the item.
Why SKUs and Serial Numbers Cannot Be the Same
The fundamental distinction between the two codes lies in their purpose: the SKU manages inventory categories in bulk, while the Serial Number manages individual assets. A retailer may sell a thousand units of the same smartphone model, and all units will share one universal SKU. Each physical unit, however, must possess its own unique Serial Number for accountability and tracking purposes.
This difference also extends to who assigns the code. The retailer or logistics partner creates and manages the SKU to facilitate internal operations, and the SKU can be retired or changed by the seller. In contrast, the manufacturer is responsible for generating the Serial Number, ensuring it follows a standardized, sequential format necessary for traceability across different national boundaries. The Serial Number remains a permanent identifier for that specific manufactured item.
How SKUs and Serial Numbers Work Together
Despite their separate functions, both the SKU and the Serial Number coexist on a single product to manage both the bulk inventory and the individual unit history. When a shipment of high-value electronics arrives at a retail distribution center, the product’s single SKU informs the inventory system what product has arrived. Simultaneously, the system scans and logs every individual Serial Number to record which specific units are now in stock and available for sale.
During the checkout process for a customer, the SKU is typically scanned to retrieve pricing information and deduct the item from the general inventory count. For products requiring post-sale service, the sales receipt will often record the item’s Serial Number alongside its SKU. This dual logging ensures that while the retailer maintains accurate stock levels using the SKU, they can also provide specific warranty and repair support using the unique SN.
Other Important Product Tracking Codes
Consumers encounter other identifiers used in global commerce beyond the SKU and Serial Number. The Universal Product Code (UPC) is a globally recognized code, standardized and governed by organizations like GS1, primarily used for point-of-sale transactions and external trade. Unlike the internal SKU, the UPC allows any retailer to instantly identify a product and its manufacturer for pricing and billing.
The Manufacturer Part Number (MPN) is an internal code used by the company that makes the item. The MPN helps the manufacturer organize its components, distinguish between different versions of a product design, and track parts for assembly and ordering. While the MPN is for production and parts management, the UPC is for external commerce. Neither code fulfills the inventory grouping function of the SKU or the individual unit tracking of the SN.