The product is a generic definition of something that is made available in your store, such as "Shirt". Stock Keeping Units (SKUs) are the variations of this product.
Products can vary by shape, color, size, among other characteristics. You may have the same Shirt (product), but as T-Shirt, Short Sleeve or Long Sleeve; in the colors White, Black or Blue; in sizes S, L or XL.
In this example, one of the SKUs of the "Shirt" product could be "White Long Sleeve Shirt XL". This is the item that physically exists in your stock.
On VTEX platform, one of the conditions for your product to be active, that is, to appear in your store, is to have an SKU assigned to it, even it this product has no variations. In that case, you'll have 1 SKU for 1 product: for example, product "Shirt", with SKU "Shirt".
Structurally, first you define the product information and then you create your SKUs.