A bundle is used when you want the inventory of a product to be automatically calculated from the inventory of another product or a group of products.

You can sell more than 1 quantity of the same product together as a pack. In fact some products are commonly sold as packs instead of a single quantity.

For example a pack of 6 coffee mugs.

Some products go together very well and selling them together as a bundle makes sense.

For example shampoo and conditioner or hammer and nails.

Print on demand or customised products use the same base product on which some customisation in done as per the need.

For example, printed t-shirts. You can use the same white t-shirt as the base product on which different designs are printed. This way for each design the inventory is calculated based on the white t-shirt.

An assembled product is made from several different parts. These parts are not sellable products in themselves. But they are the parts of the product.

For example the bundle product is an Ikea table. The table is made from 1 table top, 4 legs and 16 screws. The table in this case is a bundle which is made from different parts. Each part has its own inventory. So the sellable inventory of the table is calculated from the inventory of parts.

A product can have more than 1 SKU. The physical product is the same but it has more than 1 SKU. Perhaps it has different SKUs on Amazon and Shopify.

For example on Amazon the SKU is AMZ762 and on Shopify the SKU is SHOP450. Now you want to track inventory using the Shopify SKU SHOP450. To do this you can create a bundle product of SKU AMZ762 with the component product as SHOP450. This way the inventory of Shopify SKU will be used to calculate the inventory for the Amazon SKU.