How to Create SKU Numbers (Step-by-Step + Examples)

What is a SKU number?

A SKU (Stock Keeping Unit) is an internal alphanumeric code you create to identify each unique product in your inventory.

To create SKU numbers, you combine short codes for key attributes — like category, brand, size, and color — into a single dash-separated string.

Here's the step-by-step process.

If you're running a product-based business, setting up SKUs is one of the first things you should do. A cloud-based inventory management system can help you organize all your SKUs in one place and keep counts accurate across warehouses, sales channels, and production runs.

Why SKU numbers matter for your business

Setting up your products with well-structured SKUs makes it easy to reference items quickly, track stock in real time, and gain deeper insights into how your products perform. Here's what a solid SKU system gives you:

Faster inventory counts. Warehouse staff can scan or read a SKU and immediately know what they're looking at — brand, category, size, color — without opening a box.

Better sales analysis. You can filter sales reports by any attribute baked into your SKU. Want to know which color sells best across all shirt sizes? Your SKU structure makes that a quick report.

Fewer picking errors. When every variant has a unique code, your team is less likely to ship the wrong item.

Smoother communication. Instead of saying "the large blue widget from Acme," your team can reference a single code like ACM-WDG-BL-LG.

SKUs also become the backbone of more advanced systems like MRP software and bill of materials management, where each component and finished good needs a clear identifier to drive production planning.

Want real-time visibility into every SKU? See how Brahmin tracks inventory across all your channels →

How to create SKU numbers step by step

There are no universal rules for creating SKU numbers. Every business has different products, categories, and priorities. The guide below gives you a repeatable process — along with real examples — so you can build a system that works for your specific operation.

Step 1: Identify the attributes you want to encode

Before you create a single SKU, list out every attribute that helps distinguish one product from another. These are the building blocks of your code.

Common attributes include:

Brand or manufacturer — useful if you carry multiple brands

Product category — shirts, widgets, sauces, supplements, etc.

Product name or type — the specific item within a category

Size — S, M, L, XL, or numeric sizes

Color — BL for blue, RD for red, BK for black

Material or flavor — relevant for food, cosmetics, or apparel

Packaging type — bottle, pouch, box

Not every attribute will apply to your business. A cosmetics manufacturer might need shade codes, while an electronics manufacturer cares about voltage or connector type. Pick only the attributes that help your team tell products apart.

Step 2: Create a code system for each attribute

Once you know which attributes to include, assign a short abbreviation to every possible value. This is where consistency matters most.

Here's an example for a clothing company:

Brand codes:

Size codes:

Color codes:

Keep a master reference document — a spreadsheet works fine — so every person creating SKUs uses the exact same codes. If one team member uses "BLU" for blue and another uses "BL," you'll end up with duplicate entries and messy data.

Step 3: Define your SKU format and order

Decide the sequence of attributes and stick with it across every product. A good rule of thumb: start with the broadest category and work toward the most specific detail.

A common format:

[Brand]-[Category]-[Color]-[Size]

Step 4: Put it all together

Let's build a few real SKUs using the codes above.

Notice how each SKU reads left to right from the broadest detail (brand) to the most specific (size). Once your team works with this system for a few weeks, they'll be able to read a SKU and know the exact product variant without looking it up.

Example for food and beverage manufacturers

If you manufacture sauces or beverages, your attributes might look different. Here's a quick example:

Food and beverage manufacturers often pair SKUs with lot numbers for traceability. The SKU tells you *what* the product is, while the lot number tells you *when* and *where* it was made.

How to create SKU numbers in Excel or Google Sheets

Many businesses start building SKUs in a spreadsheet before moving to dedicated software. Here's a simple approach:

Create a "Codes" tab. List every attribute (brand, category, color, size) and its corresponding abbreviation in separate tables.

Create a "SKU Builder" tab. Add columns for each attribute, then use a formula to concatenate them with dashes.

Use a concatenation formula. In Google Sheets or Excel, a formula like =A2&"-"&B2&"-"&C2&"-"&D2 combines your attribute codes into a finished SKU.

Add a uniqueness check. Use COUNTIF on the SKU column to flag any duplicates. Every SKU must be unique.

Spreadsheets work for a small catalog, but they don't scale well. Once you're managing hundreds of SKUs across raw materials, work-in-progress, and finished goods, a dedicated inventory management system prevents the errors and version-control headaches that come with manual spreadsheets.

SKU best practices: do's and don'ts

There's no single "right" way to name SKUs, but these guidelines will save you headaches down the road.

Do:

Keep SKUs short. Aim for 8–12 characters. If an attribute isn't essential for distinguishing products, leave it out.

Lead with the highest-level category. The first few characters should represent the broadest grouping (brand or product line).

Always follow the same attribute order. If your format is Brand-Category-Color-Size, never swap Color and Size.

Use dashes as separators. Dashes are easy to read and universally supported by software systems.

Mix letters and numbers. Alphanumeric codes are easier to scan visually than strings of only numbers.

Start with a letter, not a number. Leading letters provide a quick visual cue and prevent software from treating your SKU as a numeric value.

Don't:

Spell out full names. "ACME-TSHIRT-BLUE-MEDIUM" is too long. Use abbreviations.

Use special characters. Ampersands (&), slashes (/), and periods can break imports in many software platforms.

Start with zero. Some spreadsheet programs strip leading zeros, turning "012" into "12."

Reuse manufacturer part numbers as SKUs. Manufacturer numbers (MPNs) serve a different purpose. Your SKU system should be yours — internal, consistent, and built around how *you* categorize products.

Overload with meaning. If you try to encode every possible detail, you'll end up with 20-character codes nobody can remember.

SKU numbers vs. UPC, EAN, and MPN

SKUs are often confused with other product identifiers. Here's how they differ:

Your SKU is entirely under your control. You decide the format, length, and attributes. UPCs and EANs, on the other hand, are standardized codes you purchase from GS1 for retail distribution.

Frequently asked questions

How do you create a custom SKU?

Pick the attributes that matter for your products — like brand, category, color, and size — assign a short code to each value, and combine them in a consistent order separated by dashes. For example, a blue medium t-shirt from Acme becomes ACM-TSH-BL-MD.

How do you generate SKU codes in Excel?

Create a column for each attribute (brand, category, color, size), enter the short codes, then use a concatenation formula like =A2&"-"&B2&"-"&C2&"-"&D2 to assemble the SKU automatically. Use COUNTIF on the result column to catch duplicates.

What is a SKU generator?

A SKU generator is a free tool (offered by companies like QuickBooks and others) that automatically creates SKU codes based on product names and attributes you enter. They're helpful for getting started quickly, but for long-term consistency you'll want to build your own system with documented rules.

How do you create SKU numbers for clothing?

Clothing typically needs codes for brand, garment type, color, and size — and sometimes material or fit. A common format looks like BEL-TNK-WH-SM (Bella Basics, Tank Top, White, Small). Make sure every combination of color and size gets its own unique SKU.

How Brahmin Solutions can help

Brahmin Solutions is a cloud-based manufacturing platform for growing manufacturers doing $500K–$50M in revenue. It handles inventory management, MRP, production planning, and lot tracking in one system — including SKU management where each variant gets a unique code and real-time stock tracking across every location.

If you've outgrown spreadsheets and need a system that keeps your SKUs, BOMs, and orders organized without the cost or complexity of enterprise ERP, book a demo and see how it fits your operation.