Update: Over 70 comments were posted within a few hours of this post going live. While I want to answer all of your questions, I’ve decided for now to hold them in moderation otherwise this post will end up with hundreds of comments when we still haven’t even finished building the feature. Thanks for understanding.
In August I posted on the blog that we were about to start implementing changes to our variations system alongside our regular updates. Well, that’s exactly what our engineering team has been working on, and in this post I want to share a few early screenshots with you. Before we continue, please keep in mind this is a huge task. I’d estimate we’re about 30% through the changes we’ll be making, but I believe it’s important to keep you “in the loop” as we go.
One of the biggest wins you’ll get from the changes we’re making to variations (now called options) is flexibility. You’ve told us that options play a huge role in your product merchandising and inventory control, and I believe the way we’ve redesigned options just makes everything so much easier (let alone faster) and more intuitive not only for you and your staff when managing products, but also for your customers.
I know you’ll probably have questions about how everything will work moving forward, and I’ll be posting another options update early in 2011 to keep you abreast of our progress, but for now here are the screenshots of our work in progress:

Creating an Option
One of the first things you’ll notice when creating an option is that there are so many types of options you can create. If you sell apparel then you’ll appreciate the swatch option, which lets you specify 1/2/3 color values and even upload your own textures.
If you sell computers then you’ll appreciate the “Product list” option, which lets an option contain a list of other products you sell in your shop. For example, you could create an option called “Display” and the selectable values could include the different types of computer monitors you sell.

Creating a Swatch Option
In this screenshot we’re creating a swatch option. Notice how you can specify 1/2/3 color combinations using the color picker tool? You can even include texture options and upload your own textures. These are ideal when selling apparel, shoes, etc.

Creating an Option Set
An option set is a combination of options which can be applied to a product. You’ll notice the search box under the list of available options. This helps you quickly find options if you have dozens or hundreds already created. You can also drag & drop to change the display order for how options will appear on your product page.

Disabling Specific Option Values by Default
Specific option values can also be disabled by default when creating a set of options, as shown above. A great use case here is t-shirts. Let’s say you create an option called “Color” and you add 100 colors. Now most of your t-shirts might only come in 12 base colors, so you disable the other colors and only enable them once the option set has been applied to a product.

Disabling Specific Option Values by Default
Assigning an option set to products is easy. You can see here that we’ve assigned the “iPod Options” option set to a product. Notice the 3 tabs down the left: Option Set, SKU Builder and Rules. I’ll discuss the latter two below.

Creating SKUs Based on Specific Option Combinations
The SKU builder allows you to create SKUs of different option combinations for a product. You’ll then be able to manage inventory for each SKU. The most powerful decision we made regarding SKUs is that not all options have to affect your SKU, meaning extreme flexibility when managing inventory with options.
For example, let’s say color, size and style affect your t-shirt SKUs, but uploading an optional custom logo which you’ll embroider onto each t-shirt does not.

Creating a Rule to Adjust Price, Weight & Image Based on Options Selected
You can also create rules to adjust product options when a particular option value or combination of values is selected in your store. In this iPod example you can see we’re adding $149 to the price, 1.2 LBS to the weight and showing a different product photo when the “Beats By Dre” headphones are selected in combination with any color.
So there’s a quick peek at what we’re currently working on. I’ll have another update for you early in 2011 when we’ve made more progress. Please keep in mind that this is a huge task and we’re only about 30% done. We’re excited with our progress so far and can’t wait to get things wrapped up so you can get your hands on this release.