SKU — Stock Keeping Unit
Definition: A unique identifier for every distinct product variant a business sells — size, color, configuration. SKU counts drive operational complexity more than revenue ever does.
Example
A DTC brand with 4,000 SKUs and $20M revenue is usually drowning in inventory; cutting to 400 SKUs often raises margin without hurting sales.
When you'll hear it
SKU shows up most often in board meetings, quarterly business reviews, and strategy off-sites. When someone uses it, they're usually referring to stock keeping unit — and they expect the room to already know what that means.
FAQs
What does SKU stand for?
SKU stands for Stock Keeping Unit.
What does SKU mean in business and finance?
A unique identifier for every distinct product variant a business sells — size, color, configuration. SKU counts drive operational complexity more than revenue ever does.
Where will I hear SKU used at work?
SKU comes up most often in board meetings, quarterly business reviews, and strategy off-sites. It's used as shorthand for stock keeping unit, so people assume you already know the term.