Items used in the supply chain have a GTIN and a relationship with other GTINS. These relationships are configured by identifying their place in the Trade Item Hierarchy.
Here is an example of how a 2-level and 3-level hierarchy is built:
When deciding which item will be your 'Base Unit', it is important to consider whether or not this item can be 'broken down' into smaller hierarchy levels by a distributor you sell to (Onelink for example).
If so, then you should assign GTINs to the lowest level possible, to keep control over your supply chain, and allow the distributor to use only GTINs you have assigned to the products.