Selling on multiple marketplaces such as Amazon, Walmart and eBay, has become the holy grail for many online retailers.  It’s no surprise why, as expanding to multiple marketplaces enables online merchants to reach new audiences, increase the visibility of their products, and ultimately increase sales.  However, selling on more than one online sales channel poses unique challenges that if not dealt with correctly, can affect sellers’ bottom line. One of the most obvious, yet least appreciated, is SKU management.

While SKU management may seem like one of the most tedious and complicated tasks for ecommerce retailers, it’s actually one of the most important.  Whether you are a small business or a large corporation, organizing data is a crucial component to your success.

Let’s take a look at some best practices in organizing SKUs.

SKU’S VS UPC’s

One of the first steps to organizing data is assigning product identifiers to your inventory.  There are 2 ways of identifying your inventory:  Stock Keeping Units (SKU) or Universal Product Codes (UPC).  SKUs are product identifiers unique to each retailer in order to keep track of their items. UPCs are identifiers created by the manufacturer of a product.

Often these 2 identifiers are used interchangeably, but they differ from each other in a few significant ways:

Although some retailers use UPC codes as their SKUs, it is best to avoid this practice as it may lead to future problems.  For instance, if a manufacturer changes the UPC code of a product, or if a retailer changes the manufacturer of a given product, then the retailer’s UPC-based product identifier system becomes irrelevant and obsolete.   For this reason and many others, we recommend that retailers develop a unique SKU system for their products that can be used across multiple marketplaces.  Synchronizing SKUs across marketplaces makes it easier to issue bulk updates and to import live listings.

SKU DO’S AND DON’TS

Below are some tips on developing a healthy SKU system:

 

Of course, there are times when synchronizing SKUs on multiple marketplaces may not be feasible.  For instance, merchants may have created seller accounts on various marketplaces at different times and may have assigned different SKUs to identical products across multiple marketplaces before turning to an inventory management system. As a result, their SKUs and listings become difficult to manage. Solid Commerce has a solution to this problem called “PO Merge” (Purchase Order Merge).

PO MERGE

A PO merge offers the seller a way to consolidate all of their same-item listings from different marketplaces under one SKU within the Solid Commerce environment. In Solid Commerce, this merge method enables the seller to effectively track the life and history of any product they carry.

Below is a scenario that demonstrates how PO Merge works:

  • A person sells the same item across 3 different online marketplaces: “eBay”, “Amazon”, and “Walmart.”
  • Inventory for all 3 marketplaces is shared in a common warehouse.
  • This warehouse supplies the same blue toothbrush to all three marketplaces. eBay sells it as “SKU #1,” Amazon sells it as “SKU #2,” and Walmart sells it as “SKU #3.”
  • Using PO Merge, the warehouse will identify the toothbrush with a 1 master SKU ID “SKU #1” internally.
  • eBay returns “SKU #1”, Amazon returns “SKU #2”, and Walmart returns “SKU #3” back to the warehouse.
  • The warehouse recognizes all three returns as the same product, and subsequently increases its stock of “SKU #1,” which is the new master SKY, by 3.
  • In this situation, the warehouse can recognize “SKU #1” from eBay, “SKU #2” from Amazon, and “SKU #3” from Walmart as the same item because all are merged under one identifier, “SKU #1” within the warehouse’s environment.

 

Ultimately, proper SKU assignments will allow companies to grow with the least amount of inventory complications.  If you are on one marketplace, make sure you spend time creating a clear SKU system so if and when you decide to expand your business to other online sales channels, your inventory management will be much easier to handle.  If you are already on multiple channels and are managing your inventory manually with a disparate SKU system, consider using Solid Commerce’s PO Merge to help you manage your inventory.