To add or edit Categories go to  Selling  >  Dashboard  and click on Store Categories  -



You can create a Hierarchy of Categories that ideally augments the existing Store Filters (Brand, Series, Production Status, Date Released and a few others). Just add new items using the New Category button in the top right  -



Say you create categories to also sort your Items for Sale by Country or as in this example sort books for sale by Car Brands  -




Which then creates this in your Store  -





As you add or edit Items for Sale you can add them to the Categories (you can add each Item for Sale to more than one Category)  -