SKU, or stock keeping unit, is a unique identification code assigned to a product or service for inventory tracking or identification purposes, enabling the company to systematically track its inventory or product availability, such as in warehouses and retail outlets.  Typically, an SKU is associated with any purchasable item in a store or catalog.

Magento uses SKU as a unique identifier/code for a product, across every store and websites. SKU is global, meaning if you update the SKU for a product in one store, it will update in all other stores as well. Aside from product ID, the SKU is used as the main identifier for each product in store by a variety of methods in the core code.

Magento has an option to set SKUs dynamically for configurable products. For details on dynamic SKUs in Magento please refer to Magento User Guide (chapter about Configurable products).

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