Product types allow you to pre-define different classes of products.
For example, you could have product types for Physical and Digital goods on your site. Or product types for hats, shirts, shoes, etc.
For example, you may have two product types for Crew Neck and V-Neck t-shirts, but several categories or collections of shirts like Funny T-Shirts, Art T-Shirts, and College T-Shirts, which contain both product types.
Customers don’t always see product types on the front end, and sometimes they are just used internally. Shopify, for example, lets you auto-populate collections based on product type.
It’s a tie. Shopify and Lemonstand both have product type fields.