Product Characteristics are attributes that can be added to the product definition to extend the description of each product.Examples of Characteristics are Size, Color, Quality, Shape or Weight. These characteristics can be used later to filter or search products.
Once the definition of the characteristics are created these can be assigned to a product and then create other products or SKU based on this Generic Product and its characteristics. This is a generic product where common attributes like tax or prices are defined. By default products inherit all the attributes of the Generic Product such as taxes, prices, etc. They can be overridden on each product. Generic products cannot be purchased or sold or used in any document.
For example the Generic product Shirts Summer Season 2013 by My Provider implements the Characteristics Size and Color as variants. This Generic Product will have as Product Variant each combination of Color and Size.