Skin is a texture image that replaces the default skin of your avatar. Skins can be re made and uploaded in Sine Space using Virtual Goods component.
You can download the default avatar skin template from the following link.
Once you have created the Skin save the PSD and import it back to Unity.
GOTCHA: Do not store the edited Skin in the 'Artist Project' folder, it will not be uploaded. (That folder is ignored during uploads)
Setting imported Skin Texture
Setting imported Skin Normal Map
Normal Map gives more definition to the skin.
Once you have imported the normal map
you can create a new material and drag skin texture and normal map in normal map slot.
Once the material is created you can chose the material shader for skin from built in unity standard, custom shader or SineWave skin shader.
SineWave Skin Shader
Once the skin material is created, it needs to be converted to fit the skeleton.
Create an empty game object in the scene and add the Clothing Item Settings Component to it.
Chose the relevant Skelton for the clothing item. Please note Space supports multiple third party skeletons as well as it's own native male and female models.
If you are creating only skin, select Skin Base slot. If you want the skin to have more than just skin select other applicable slots.
Select Only contains skin if you are uploading skin only. If you are doing a combined outfit Don't select this.
Set the number of material the skeleton you are using has.
Sine Space male and female skin only has 1 material; if you have selected that as the skeleton Set the size to 1.
After the size is set. Drag the skin material in the material slot.
Attach the virtual goods script and complete the submission process.
See Virtual Goods for more details on the virtual goods script.
To know more on how to create and upload skins watch the tutorial shown here