Variant group
A variant group is one product record that holds every version of a single style. The parent carries the style; the children carry each combination of attributes such as colour and size. One boardshort in three colours and five sizes is one variant group with fifteen children.
What it looks like in your POS
Every point-of-sale system models this, and every one names it differently. Lightspeed Retail calls the parent a matrix and the children items. Shopify calls the parent a product and the children variants. Square calls them items and variations. The structure is identical in all three: one style, many sellable children, each with its own barcode and stock count.
Why it matters more than it looks
The variant group is the unit you actually merchandise and report on. Sell-through by style, reorder decisions, and open-to-buy all read the parent. Break a style into separate products and every one of those numbers fragments: a boardshort selling well in Black and badly in Blue reads as two unrelated products rather than one style with a colour problem.
It is also the unit that receiving gets wrong most often. When a vendor ships a colour you do not yet carry, the correct action is to add children to the existing group. Creating a second product instead is the most common way catalogs accumulate duplicates.
When something should not be a variant group
If a product has exactly one version and no variation is coming, a standalone product is simpler and clearer. A wax comb, a single-size tool, a book: these have nothing to vary. Forcing them into a group adds a layer with no reporting benefit and makes the catalog harder to read.
The test is whether you would ever want to compare versions of the thing against each other. If the answer is no, there is nothing to group. If the answer is yes, and especially if a second version is likely next season, build the group now: converting a standalone product into a group later means moving stock and sales history onto new records, which is considerably more work than starting correctly.
Questions
Can a variant group vary on more than colour and size?
Yes. Length, width, fit and material are all common third attributes. Most POS systems allow two or three attributes per group; check yours before designing around a fourth.