INVENTORY! Why is that Account Number, Customer Number, SKU Number So Important?
When was the last time you had a great time interacting with a relational database? LOL! Yes, inventory is the hard stuff of ecommerce and e-commerce entrepreneurs typically have to learn about managing your inventory.
It’s super easy when your business is small, and you can count your inventory by turning your head and looking at what’s on your office shelves. But, as you grow, your inventory will expand and overflow your office and garage. This is when you realize that managing your inventory needs a new approach and where you realize that organization and consistency is super important. How do you know when to order new product? How do you know if you have too much inventory? And how do you know where the product is stored? You need an inventory database – an app to manage your product - and you need a process to ensure that your inventory is recorded correctly.
The last time you dealt with an online shopping platform, a social media application, your online banking application, or filed a health insurance claim online, you interacted with a relational database. Relational databases are the backbone of those applications, and so many more. A relational database is the core of your inventory management system so it’s good to learn a little about managing the inventory data and how being consistent with your data helps you.
Relational databases organize information into tables of data, like a spreadsheet. The columns represent fields (Name, Account Number, Address, Product Number) and the rows represent records (An entry that contains all of a customer’s basic information, or an entry that has all the details of a particular product sale).
There are typically separate tables for separate groups of related information. On an online shopping site there will be a table that contains all your customer information with that site (Customer Account Number, Name, Address, Email, etc). Another table will capture all the data from a particular sale (Customer Account Number, Sales ID Number, Product, Price, etc.), and another table will track the payment information for a particular sale (Customer Account Number, Card Number, Card Issuer, etc.)
Notice anything common to all three table examples shown below? The field ‘Customer Account Number’ is present in all three. The term ‘Key Field’ is sometimes used to describe this linking piece of information. Relational databases use ‘joins’ between tables – data connections that tie together the key fields common to other tables into a concept, such as a specific product sale. And this means that all the information from each table can be pulled into a report.
The graphic below demonstrates this concept:
The key piece of data, common to all the tables shown above, is ‘Customer Number’. This is the link that ties all the sales information together, so it is essential that this singular piece of data is correctly entered in all three tables, thus enabling the generation of a coherent report on a sale. Otherwise, how do you know who ordered what and where to ship it to?
This illustrates the importance of the key data used in all the systems mentioned above. Your Customer Data is recorded by your on-line Store provider as part of their software. So, your SKU codes are just like your Customer Numbers, also recorded in your online store, but picture what happens if the SKU code in your inventory list, or on the bin in your warehouse is different from the sale? How are you going to figure out what to ship? Every one of your SKUs are critical pieces of data that allows you to track product across your sales and inventory tracking systems. Your products come in different sizes, colors, or versions. The SKU code is that one piece of data that allows your store, ordering, warehouse, shipping and accounting systems to link different products and to record every product consistently.
In conclusion, get those SKU numbers right!
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