NOTE: Your sub-category will not show up on your site until you add a product to it.

Click on Categories under "E-Store" on the left hand side in your storeadmin.

Since we already added a Bracelets category (previous tutorial), let's add a sub-category.
Click on the Add button to add a new category.

Category Name

Give the sub-category a name. This example is a Sterling Silver category.

Choose a "Parent Category" for your sub-category to sit in.
In this case, I chose Bracelets.

Continue adding this sub-category in the same way you added a regular category.
Fill in the description, keywords, meta-title etc.
When you're finished, click Add Category.

Now you should see your new sub-category listed under the parent category.

Note: When you view your site after making a sub-category, you might not see the sub-category listed until you actually add a product to it.