I am getting really confused. I have looked through the documentation and to add a new variation click on the 'variation type' link under the Products menu. On my install there is no such link. The only link I have is 'Categories' and 'Product Types' under product settings.
I have 2 separate installs. One with the test products and one without. Neither install has this link. The site with test products has different variations so I know it works.

I am using this version of Commerce. 7.x-1.3+40-dev

How do I add a variation to a product?