When you add a new shop, you will see 6 product types that you can select.
This is the most popular product in Magento. It is a physical product with a SKU and no variations. For example, a cup, a table, a pencil. Simple product can be joined with a Grouped, Bundle or Configurable product types.
A bundle of simple (or virtual) products. Magento Merchants can build their own product from the available portfolio. These products cannot be sold separately. For example, a bike where a customer chooses wheel size or damper type.
Every one of these items is a simple product, but can be sold as a bundle product.
Non-physical product that cannot be touched, but can also be sold, like a warranty, a service, a reservation, insurance. Virtual products doesn’t let you select a shipping method and can be joined with Grouped and Bundle products.
Enables a merchant to sell single products in groups or to group products by season or color. Price cannot be specified for grouped products, but a discount can be applied. For example, a mug is sold together with a plate.
Downloadable products are online software products, like an MP3 file, an eBook, a Magento extension, etc.. You cannot select a shipping method for downloadable products because there's nothing to ship.
A configurable product is a simple product with a list of options. Each option is a single product with its own SKU, so it can be easily found in storage. For example, a jacket available in different colors or sizes or bike available in different frame sizes. Every variation can have its own cost.