Once logged in to Magento, in the main navigation go to Catalog/Manage Products

This brings you to a list of the existing products, which you can click and edit as needed, or create a new
product by clicking the “Add Product” button on the top right:

Leave the Attribute Set as “Default”, but change the Product Type to Configurable Product:

Select the “Color” (or whatever attribute you have set to be configurable) attribute and continue:

Now you will be on the page where all of your Main products information will be held. All fields marked with an asterisk need to be filled out, as well as, any additional fields you would like the product to display. On the left side is the different areas to be filled out, and you can navigate within the product using these.
Important: Product will not be visible unless you place it “In Stock” under the “Inventory” tab, and place it on a category in the “Categories” tab.

On the “Images” tab on the main product we are creating we need to upload images that will be associated with the product.

We need to then select the “Associated Products” tab on the left side, which will be the very last option on the list. Once on this tab, there are a few different ways to add all of our simple products (which are the individual color and pattern products that are contained within the main Configurable Product we just created). The easiest and fastest way is to use the “Quick simple product creation” option. This is found in the middle of the three options. The “Name” and “Sku” options will already be filled out since they are children products of the main one we created. You must fill out the “Weight” (which doesn’t have to be 100% accurate, just an estimate of how much the product weighs), set the “status” to Enabled, “Visibility” needs to be set to Not Visible Individually, since we do not want a customer to ONLY see this color option of the product. For the “Color” dropdown option ALL color swatches you have created will be listed, select the appropriate one, which in this case will be Black. Now set the “Qty” to the amount you have in inventory if you are using Magento to keep track of your inventory, if not, set it to a large number (I use 10000000). Next, press “Quick Create” and repeat steps with the remaining color and pattern options for the product.

Once all of you Simple Products have been created, the last step is to add the individual main product images for the color and pattern variations. At the bottom of the tab there is an area where you will fine a list of the simple products you just created for the main product. On the right side of each product you will see a link labeled “Edit”. When you click on this link a popup window will appear that looks pretty much the same as the one you are on, the only difference is that this window is where all of the individual product information is held. The only thing we need to change here, is to add the image. Click on the “Images” tab on the left side, and upload the image associated with the simple product you are editing. So if I clicked “Edit” next to the Black Duffle Bag, I will upload my image of the black duffle bag and set it as the “Base Image, “Small Image”, and “Thumbnail” image. Press “Save”, which will close the popup window, and repeat for remaining simple products. Once all of the simple product images have been added, press “Save and Continue Edit”.
Your product should now be visible in the categories you chose to show it on!