Why do I see 2 options when adding a new Product?

The reason 2 options are shown is because there is an extended version of Product. For example, this could CustomProduct. If, when you hit add, you hit Product, you will only get the Broadleaf Product's fields on the entity form. If you instead choose CustomProduct, you will see the fields that were added in the extension as well. 

Most of our users will want to hide the BLC default product since only the extended version is needed. To default to the extended version you can add the following annotation to your CustomProduct class above your class's name.  Note that the ceilingDisplayEntity needs to reference the concrete implementation class (not the interface):

@AdminPresentationClass(friendlyName = "My Product", ceilingDisplayEntity = "path.to.the.class.CustomProductInpl")
public class CustomProductImpl extends ProductImpl implements CustomProduct {