The first step is creating unique product types, yes. But in this case the question is a bit more involved. The real solution is commonly called a Product Display.

• Go to the regular Drupal content types admin screen.
• Create a new content type (the usual suggestion is to call it Product Display but I prefer Store item)
• Add the existing field_product entityreference field.
  • Check both of these fields: Required field and Render fields from the referenced products when viewing this entity
  • For Product types that can be referenced - unless you have a very complex set of Products, it's best to leave all of them unchecked.
  • Inline Entity Form has some powerful options for managing your products so choose the ones that are best for your situation. I recommend checking Refer to the referenced products as "variations"
  • Set the Number of values to Unlimited. This will allow you the greatest flexibility as you manage your Store Items in the future.
• Select the Inline Entity Form widget in the Manage Display tab for this field. It will allow a much smoother editing experience in the next step.

• With your new Store item content type, go to /node/add/store-item
• Give it a generic title, like Shirts instead of Red XL Shirt. The variations will be entered on this form.
• Now find an area called Variations where you can create and manage the Products that belong to this Store Item.
• As you select or create new Variations, you will have to give each one unique options, a price, and a SKU so that the store knows how much to charge as the visitors select different options.
• Save your Store item and when you view this node it will automatically have the options and dynamic price listed.