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 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.
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.
Virtual products do not have a physical presence, and are typically used for such things as services, warranties, and subscriptions. Virtual products can be used in association with grouped and bundle products.
A bundle product let 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.