People involved in purchasing, inventory, or product research often encounter various alphanumeric codes used for identification, leading to confusion about their purpose. The proximity of these identifiers on packaging and product listings frequently leads to the assumption that a Stock Keeping Unit (SKU) and a Model Number are interchangeable terms. However, these codes serve entirely different functions and are created by different entities within the supply chain. Understanding the precise purpose of each identifier is necessary for accurate inventory management, efficient sales tracking, and proper product support.
Understanding the Stock Keeping Unit (SKU)
The Stock Keeping Unit (SKU) is an alphanumeric code developed and used internally by a specific retailer or distributor. Its primary function is to facilitate the management and tracking of inventory within a particular sales environment or warehouse system. SKUs are not standardized across different companies; one retailer’s SKU for a product will almost certainly differ from another retailer’s SKU for the exact same item.
SKUs are typically structured to be human-readable and encode specific product characteristics directly into the code itself. For example, a retailer might structure an SKU to include codes for the product category, vendor ID, size, and color variant. This internal logic allows staff or inventory software to quickly glean information about the item. The system enables precise tracking of stock levels, efficient reordering, and granular analysis of sales performance by product variation.
The flexibility of the SKU allows a retailer to adapt the code structure to accommodate changes in their product line or inventory strategies. If a product is offered in three different colors and two different sizes, the retailer will assign six distinct SKUs to account for every possible permutation. This ensures that every specific item variation in stock is uniquely managed for accurate counting and sales reporting. SKUs are focused on the logistical aspect of stock control and movement within a business.
Understanding the Model Number
The Model Number is a standardized alphanumeric code assigned by the product’s original manufacturer. This identifier specifies a particular design, configuration, or technical specification of a product, representing the item’s identity regardless of where it is sold. The manufacturer ensures that the Model Number remains consistent across all sales channels, distributors, and geographic regions.
Manufacturers use the Model Number to manage production lines, track design revisions, and communicate precise product specifications. When a consumer needs technical support, warranty service, or a replacement part, the Model Number is the definitive reference point for identifying the exact product version. This standardization maintains consistency in product descriptions and technical documentation throughout the global supply chain, serving as a global reference for a specific item.
The Model Number is generally fixed for the entire lifespan of a specific product configuration. If a manufacturer updates a product with a significant technical change, they will often issue a new Model Number to distinguish the revised product. This practice ensures clarity for consumers and service technicians, preventing confusion regarding compatibility or feature sets. The Model Number differentiates between models in a company’s line of devices or appliances.
Key Differences Between SKU and Model Number
The fundamental distinction between these two identifiers lies in their creator and intended audience. The Model Number originates with the manufacturer and serves as a universal product identifier. The SKU is created by the retailer for internal stock management purposes, meaning the Model Number is static across the market, whereas the SKU is dynamic and changes between retail locations.
Creator and Standardization
The manufacturer assigns the Model Number to define a product’s core specifications, making it a globally standardized reference. Conversely, the retailer generates the SKU to optimize its local inventory system and internal data analysis. This results in the same product being associated with a single Model Number but potentially hundreds of different SKUs across various selling platforms.
Scope and Purpose
The Model Number focuses on the product itself, defining its technical attributes and configuration for warranty, support, and specification confirmation. The SKU focuses on the inventory unit, incorporating details relevant to the selling process, such as warehouse location, pricing tier, or vendor ID. The SKU tracks movement and sales velocity, while the Model Number tracks the product’s identity.
Format and Structure
Model Numbers are often concise and may appear as a combination of letters and numbers designed for system efficiency, with internal logic only known to the manufacturer. SKUs are frequently built with embedded meaning that is immediately recognizable to the retailer’s staff, using prefixes or suffixes that denote physical attributes like size, color, or packaging type. The codes are often confused because they are frequently printed in close proximity on product packaging, leading consumers to mistakenly use one when the other is required.
Related Product Identifiers You Should Know
Beyond the SKU and the Model Number, two other prominent identifiers are frequently encountered: the Universal Product Code (UPC) or European Article Number (EAN), and the Serial Number.
Universal Product Code (UPC) / European Article Number (EAN)
UPC and EAN codes are globally unique identifiers that translate into the scannable barcode found on most retail packaging. These codes are managed by a central, non-profit organization, such as GS1. They are primarily used for point-of-sale scanning, pricing, and external inventory management between trading partners.
Serial Number
The Serial Number is a unique identifier applied to a single, individual physical unit of a product. While the Model Number identifies the product design, the Serial Number identifies the specific instance of that product that rolled off the assembly line. Serial Numbers are used by manufacturers and retailers for warranty validation, tracking product recalls, and managing service histories. They are necessary for tracking the lifecycle of an individual item after it has been sold.