Go to your PRODUCTS menu and choose "Categories" from your Dashboard. Click on the ADD CATEGORY and enter the required information into the related fields.
Also while you are adding a new product, you can quickly add a new category just clicking on the plus icon.
You should define your categories and subcategories. For Example you have a Top Level Category named "Women" and you want to add a new category named "Shoes" under this category. To do that:
- Click on the ADD CATEGORY button.
- Enter the required information into the related fields.
- Choose the Main Category (ex. Women) from the drop down menu of Parent Category bar.
- When finished, click on SAVE to finish.
Now you have a new subcategory. (Women -> Shoes). What if you want to create subs of subcategories? (ex. Women -> Shoes -> Sneakers). You should follow the same process again.
This time your main category will be "Shoes" but in the Parent Category bar you will see it like "Women -> Shoes". Choose it from the drop down list and SAVE your process.
As category system is so important for your online store, you should think over and over on it to finalize.