A unique identifier assigned to each distinct product variant in a warehouse inventory.
A SKU (Stock Keeping Unit) is a unique alphanumeric code assigned to each distinct variant of a product in your inventory. Every combination of product, size, color, flavor, or configuration that is stored and sold separately is a unique SKU. Managing SKU count efficiently is one of the most important factors in 3PL cost and complexity.
SKU proliferation — having too many low-volume SKUs — is a common problem for growing brands. Each unique SKU requires its own bin location, its own receiving process, and its own pick verification. A 3PL with 2,000 SKUs from one client requires dramatically more bin space and operational complexity than one with 50 SKUs.
3PLs typically charge more for high-SKU operations due to the complexity of managing many bin locations and the risk of mix-ups. Brands with large SKU catalogs should ask 3PLs specifically about their SKU capacity, minimum velocity requirements per SKU, and whether they charge storage fees at the bin or pallet level.
A T-shirt brand sells 5 styles × 5 sizes × 4 colors = 100 SKUs. A supplement brand sells 10 products × 3 sizes = 30 SKUs. The t-shirt brand's 3PL needs 100 separate bin locations and pick paths vs. the supplement brand's 30.
It varies widely. Small boutique 3PLs may cap at 500-1,000 SKUs. Enterprise 3PLs handle tens of thousands. The key question is velocity: 3PLs are less concerned with total SKU count than with low-velocity SKUs that occupy bin space without generating pick revenue.
Some 3PLs require each SKU to ship a minimum number of units per month (often 5-10) or they charge a higher storage rate. This is to prevent "dead stock" SKUs from occupying bin space indefinitely. Ask about this policy before signing.
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