What is the difference between SKUs (Variants) and Products?

Let's say that a plan supports 500 SKUs (Variants) or 10 Products:

1 Product = “Blackpink T-Shirt”

If the “Blackpink T-Shirt” has multiple variants / SKUs, e.g.

“Blackpink T-Shirt” Sizes: S, M, L, XL, XXL (5 sizes)
“Blackpink T-Shirt” Colors: Red, Green, Yellow (3 colors)

It could potentially have up to 15 variants / SKUS (5 sizes x 3 colors).

10 Products means that you can have up to 10 different types of T-Shirts (e.g. “Blackpink T-Shirt”, “Blackpink Sandals”, “Blackpink dress” etc)

500 SKUs means that you can have up to 500 variations on those products, (E.g. “Size S Red Color

Blackpink T-Shirt”, “Size M Red Color Blackpink T-Shirt” etc).

Another way of looking at this is through your Shopify dashboard:

On your product page, if you added that product through the "Add Product" button, it's 1 product.
If you added a variant inside that product page, it's 1 variant.