The product is a more generic definition of something that is made available in your store, such as "Shirt". SKUs are the variations of this product. Products can vary by shape, color, size etc. You may have the same Shirt (product), but in the forms T-Shirt, Short Sleeve or Long Sleeve; in the colors White, Black or Blue; in sizes S, L or XL (SKUs).
In the example above, one of the SKUs of the Product Shirt 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.