Building on Sreekumar's answer, a lot depends on how you are distinguishing between Items and Products. I've seen it done a number of ways over the years, and they all seem valid, so I would not want to be more prescriptive without knowing the requirements.
But certainly a key in the decision will be the matching and survivorship rules. It is not possible to match between entities, so you need to match your products against your items, that would push you towards doing it with one entity type. But if you don't need to do this, then two entity types will give you more granularity. You may not have requirements now for separate match/survivorship rules, but they may come up in the future.
------------------------------
Gino Fortunato
Senior Solution Engineer
Reltio
------------------------------