Creating component SKUs is very similar to creating kits. In fact, you very often will be creating component SKUs while creating kits. Here's a bit more explanation:
When create a kit, you will be given the option to enter any value as a component SKU.
If a component SKU has already been created, the SKU will appear in a dropdown as you type.
If a component SKU has NOT been created, the act of typing in a new SKU will create a component SKU, which converts the SKU from traditional to component.
Reminder: Converting a SKU will clear out the available inventory for that traditional listing, so be sure to save a copy of that listing prior to converting.