$labels = array(
    'name' => _x( 'Product Categories', 'taxonomy general name' ),
    'singular_name' => __( 'Product Category', 'taxonomy singular name' ),
    'search_items' =>  __( 'Search Categories' ),
    'all_items' => __( 'All Categories' ),
    'edit_item' => __( 'Edit Category' ),
    'update_item' => __( 'Update Category' ),
    'add_new_item' => __( 'Add New Category' ),
    'new_item_name' => __( 'New Category' ),
    'menu_name' => __( 'Product Categories' ),
  );

register_taxonomy('product_categories', array('products'), array(
	'hierarchical' => true,
	'labels' => $labels,
	'query_var' => true,
	'rewrite' => array('slug' => '', 'with_front' => false)
	));

add_action('init', 'products');
function products()
{
  $labels = array(
    'name' => _x('Products', 'post type general name'),
    'singular_name' => _x('Product', 'post type singular name'),
    'add_new' => _x('Add New', 'products'),
    'add_new_item' => __('Add New Product'),
    'edit_item' => __('Edit Product'),
    'new_item' => __('New Product'),
    'view_item' => __('View Product'),
    'search_items' => __('Search Products'),
    'not_found' =>  __('No products found'),
    'not_found_in_trash' => __('No products found in Trash'),
    'parent_item_colon' => ''
  );
  $args = array(
    'labels' => $labels,
    'public' => true,
    'publicly_queryable' => true,
	'exclude_from_search' => false,
    'show_ui' => true,
    'query_var' => true,
    'capability_type' => 'post',
	'taxonomies' => array('product_categories'),
    'hierarchical' => false,
	'has_archive' => 'products',
	'can_export' => true,
    'supports' => array('title', 'thumbnail', 'page-attributes', 'editor', 'excerpt'),
    'rewrite' => array('slug' => '', 'with_front' => false)
  );
  register_post_type('products',$args);