Cant get my head around category

HI I am a non technical user 

But all I want to do is tidy up our small parts store so I can put all the parts for a pump into a category and the page just gives people a series of categories to find the spare parts for their product   So Pumps would container, power supply/Impellors etc. I have spent time reading and following the steps and created a couple of categories but cant see how the products are nested in them. 

Any help for a newbie 

thanks