You don't need to access the File Locations in Preferences. Just create a new Materials folder in a location you can access such as My Documents as you would create any other new folder. Put the SKM files into that folder. Then, in the Materials panel, open the Details menu (to the right of the drop down list).
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Click on Add collection to favorites.
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This will prompt you to navigate to and select the folder you created. Choose Select Folder. From that point on, that Materials collection should appear in your drop down list.
FWIW, you can sort your materials into sub folders if you want. For example I have a folder for my own wood grain materials. I sort the materials by species. I've just added folders inside the master "Wood Species" folder.
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If you want to add materials from a model one at a time to an existing library, you can open the secondary pane in Materials, set one to In Model and the other to the desired library. Then drag the thumbnail from the one to the other.
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If you wanted to save the entire In Model library collection as a local collection for future use, open the Details menu and click on Save as a local collection.
