A taxonomy structure should be created to achieve your business objective. Creating a hierarchy of labels help you tag and identify different categories of themes, topics, and  categories as granular as you want to. 

To create a hierarchy, start by adding a parent label.

Once you have your logic tree, click on the triangle next to the parent label to add a sub label. 

You can create as many paralleling parent labels and sub labels as you want. In the example below, the label "Purchase" includes  "product", which has 2 sub labels "quality" and "shipping". 

Labels should contain logic at each level to achieve maximum recall and precision within each node.