Most efficient way to store complex information?

See more:

SQL

database

I might be asking this question wrong, please let me know if there's a better way of formulating this question.

background:
I am making .net application to handle the product information for a company selling promotional "stuff". They require many variants a single product, multiple prices based on customer, price history, and much much more. I see some advantages with XML for this, but I have no experience with "complex" data-storage like this. Essentially there are 5'000 base products, some have 30 size-variants, then there are multiple colour variants for each size, variants that are for regular customers (printed logos etc.), then there are minimum 5 prices, and then these needs to have a price history.

I made something that was messy and buggy, by using loads of tables in a SQL-database, but a 50 product test, with a limited number of variants, resulted in 34 tables created, (had it making tables as needed).

Am I going at this problem the wrong way, thinking that a single database could hold so much data?

Simplified data-structure

<products>
	<product name="Nice Shirt" prodno="12345">
		<prices>
			<retailprice val="299">
				<history>
					<price val="99" date="2014.09.01" /> 
				</history>
			</retailprice>
		</prices>
		<variants>
			<colours>
				<colour val="red" />
			</colours>
			<sizes>
				<size val="XL" pricemod="0" />
			</sizes>
		</variants>
	</product>
</products>

This is just a simplified data-structure, written in XML, to demonstrate my thinking

Bottom line
How is the better way of storing data like this? I don't expect some finished product, but I'm in dire need of a nudge, to get moving on this project.

thanks!

Frank