Moving to Gmail can be confusing, especially when it comes to organization. You need to understand that a label can be a label, but it can also be a folder.

Brenda Wilson recently switched from Outlook to Gmail. Now she's "trying to get my head wrapped around the whole 'label' thing. When I moved an email to a folder in Outlook. it no longer appeared in my Inbox." That's not the case with Gmail.Gmail can confuse people used to other email clients, and the concept of labels causes a lot of that confusion. Labels don't quite behave like folders, although sometimes they do. Since you can attach multiple labels onto a single conversation, you have far more options.
(Remember that Gmail, by default, organizes not by individual messages but by conversations, each of which contains an original message and all of the replies to that message.)
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In a folder-based mail client, such as Outlook, you can move an email from your Inbox folder to, say, the Agnes' Wedding folder. When you do so, it disappears from the Inbox. Like a physical object, it can't be in two places at once.
But you can put any number of labels on a physical object--and on a Gmail conversation. You can assign the Agnes' Wedding label to a conversation, and it will appear in both Agnes' Wedding and the Inbox.
If you don't want it in the Inbox, just click the Archive button. You can even archive a conversation without any labels.

When you use the Labels tool, Gmail assigns the label you select to the conversation. Other labels, including Inbox, remain.
But when you use the Move to tool, it assigns the label you selected to that conversation, and removes all other labels. Effectively speaking, if not technically accurate, it moves it to a folder.
The same happens when you drag a message to the label list in the left
panel. Drag a message to Agnes' Wedding, and Gmail adds the Agnes'
Wedding label while removing all other labels, including Inbox.
(Unfortunately, when you drag from another label to Inbox, both labels
remain on the conversation.)
By the way, you can have sublabels just as you can have subfolders. Point to a label in the left panel, click the arrow button associated with that label, and select Edit. In the resulting dialog box, check Next label under and select an appropriate label.
Folders and labels: The trick to organizing Gmail
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