When planning the structure of your menu, it helps to think of each menu item as a heading in a formal report document. In a formal report, main section headings (Level 1 headings) are the nearest to the left of the page; sub-section headings (Level 2 headings) are indented slightly further to the right; any other subordinate headings (Level 3, 4, etc) within the same section are indented even further to the right.
The WordPress menu editor allows you to create multi-level menus using a simple ‘drag and drop’ interface. Drag menu items up or down to change their order of appearance in the menu. Drag menu items left or right in order to create sub-levels within your menu.
To make one menu item a subordinate of another, you need to position the ‘child’ underneath its ‘parent’ and then drag it slightly to the right.