Reselling SKU system: one code per item, from intake to sale

Which blue sweater sold?

An example seller has four blue sweaters listed on two platforms. One sells overnight. In the morning, the seller stands in front of a rack trying to match a sale notification to a garment by size and shade, pulls the wrong one, and ships a medium to a buyer who ordered a large. A stock-keeping unit, or SKU, is the small code that prevents that morning. It ties one physical item to its listing, its purchase cost and its location.

This guide sets up a reselling SKU system, drawing on eBay's developer documentation on SKU fields, IRS Publication 538 on inventory methods, and IRS recordkeeping guidance, checked November 8, 2026. It's a records method, not tax advice; ask a tax professional how your inventory should be treated.

What a SKU does in a resale business

eBay's developer documentation says sellers define their own SKU values, that sellers often use them to track products and inventory, and that eBay doesn't enforce unique SKUs except on multiple-variation listings, where each variation should have its own. In practice that means uniqueness is your job. Treat every one-of-a-kind used item as its own SKU.

IRS Publication 538 describes the specific identification method for inventory, used when you can identify and match the actual cost to the items in inventory. A SKU attached to each item and its purchase cost is a practical way to keep that link, whatever method you and your tax adviser settle on.

Step 1: Choose a short, readable pattern

A good resale SKU is short enough to write on a tag, sorts sensibly in a spreadsheet, and never repeats. One chosen pattern:

Category code – year and month acquired – running number

The month in the code helps with aging: when you scan your shelves in spring, anything starting with 2610 has been around for months.

Step 2: Keep location separate from identity

It's tempting to put the bin number in the SKU, but items move between bins. If the code contains the location, you either relabel the item or live with a wrong code. Keep the SKU permanent and record the current bin in a separate column. The small-space storage guide covers numbering bins.

Step 3: Assign the SKU at intake

Give the item its code the moment it enters your space, before photos and before listing. Attach a tag or a removable label in a consistent spot, such as an inside seam for clothing or a back cover sticker in a sleeve for books. Then:

• Add a row to your inventory sheet with the code, date, source and cost.
• Name the photo folder with the code.
• Put the code in the custom label or SKU field of each listing, where the platform has one.

Step 4: Handle lots and multiples

For a mixed lot, give each item its own code and split the lot cost across them in your records using a consistent method. For true multiples, such as five identical sealed puzzles, one SKU with a quantity column is reasonable, because the items are interchangeable. Publication 538 notes that FIFO or LIFO applies when you can't identify items with specific costs, such as identical goods that are mixed together. Ask a tax professional before choosing.

Step 5: Never reuse a code

When an item sells, its SKU retires with it. A reused code mixes two items' costs, photos and sale history. A running number that only goes up prevents that.

Worked example: an intake session

In this chosen example, a seller processes a Saturday haul.

The two sweaters cost the same and look similar, but they get different codes because they're individual used items that may differ in condition and measurements. The speaker goes to a quarantine bin until tested, as the untested inventory guide describes.

Where to write the code

• On a tag or label attached to the item.
• In the inventory sheet's first column.
• In each platform listing's custom label or SKU field, if available.
• On the packing slip when the item ships.

Privacy note: SKUs live in your records and on hidden listing fields. Don't put buyer names or addresses in them.

Common mistakes

• Building location into the code.
• Giving similar items the same SKU.
• Reusing retired codes.
• Assigning codes after listing, when the item is already mixed in.
• Keeping SKUs in one place only, so the item and the record can't be matched.

One item, one code, everywhere

If the code on the tag, the code in the sheet and the code on the listing always match, you'll never ship the wrong blue sweater. Assign it at intake, keep location separate, and retire it when the item sells.