Product Labels work in exactly the same way as product/post tags. Product Labels is used to add label tags to a product. For example, you may want to tag a product as 'Best Seller', 'New !' or 'Editor's Pick'.
The taxonomy is 'product_label'.
Setting up labels themselves uses an interface you will be familiar with. It’s recommended that you set up any label you will be using over and over in this way. Navigate to Products > Labels and you will be presented with the following screen:
Here you can quickly and easily add labels, its text color and background color.