An external product is a listing on your site that links somewhere else for purchase. The “Buy” button doesn’t add anything to your cart — it opens a URL. That’s it. No stock, no orders, no payment processing on your end.
The use case is affiliate marketing: you’re recommending products and earning a commission when someone clicks through and buys. Or you’re a content site that curates products from various retailers.
Stock: There is none. You don’t track inventory because you’re not selling anything. The product exists purely as a catalog entry with a redirect.
What to know: External products don’t generate orders in your WooCommerce reports. If you’re mixing external and regular products in the same store, your sales data will only reflect the products you actually sell — the external ones are invisible to your analytics. This matters when merchants run a hybrid store and wonder why their numbers don’t match their perceived traffic.