A simple product is a physical item with a single SKU. Simple products have a variety of pricing and of input controls which makes it possible to sell variations of the product. Simple products can be used in association with grouped, bundle, and configurable products.
A configurable product appears to be a single product with lists of options for each variation. However, each option represents a separate, simple product with a distinct SKU, which makes it possible to track inventory for each variation.
A grouped product presents multiple, standalone products as a group. You can offer variations of a single product, or group them for a promotion. The products can be purchased separately or as a group.
Virtual products are not tangible products and are typically used for products such as services, memberships, warranties, and subscriptions. Virtual products can be used in association with grouped and bundle products.
A bundle product lets customers “build their own” from an assortment of options. The bundle could be a gift basket, computer, or anything else that can be customized. Each item in the bundle is a separate, standalone product.
A digitally downloadable product that consists of one or more files that are downloaded. The files can reside on your server or be provided as URLs to any other server.