Product variations are useful when you have the same product available in different sizes or colors.
With product variations, you can:
assign different images for every product option in your store (frequently used for apparel and shoes)
automatically adjust prices with customer selections
track inventory with unique SKUs to prevent overselling
adjust the weight to get more precise shipping rates at checkout
Let's say you're selling a t-shirt that comes in two sizes (small and medium) and two colors (yellow and gray), meaning it has four variants in total.
When variations are enabled and correctly set up, any time a customer selects a variation for a product in your store, the product price and image are updated automatically.