Each product contains one or more variants. Variants are variations of the same product. For example, if you sell shoes, you may offer your customers different variations of the same shoe by size and color. If you sell movies online, you may offer in two variants of DVD format and in downloadable version. If there is only one variant entry, then the product is considered to be without variations. You must always have at least one variant per product, also known as the default variant.
Any field that is available to be configured in the variant will override the same field that appears at the product level. This feature allows you to create a product that shares the same information with all the variants underneath it while overriding some fields for certain variants. For example, the DVD format may have a very different licensing description than the downloadable version than the general description of the product.
Although not necessary, many retailers will also find it useful to provide a unique SKU number for your variants. This convention largely depends on your own stock keeping practice.