I need to automatically match product names (cameras, laptops, tv-s etc) that come from different sources to a canonical name in the database.
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The key understanding here is that you do have a proper distance metric. That is in fact not your problem at all. Your problem is in classification.
Let me give you an example. Say you have 20 entries for the Foo X1 and 20 for the Foo Y1. You can safely assume they are two groups. On the other hand, if you have 39 entries for the Bar X1 and 1 for the Bar Y1, you should treat them as a single group.
Now, the distance X1 <-> Y1 is the same in both examples, so why is there a difference in the classification? That is because Bar Y1 is an outlier, whereas Foo Y1 isn't.
The funny part is that you do not actually need to do a whole lot of work to determine these groups up front. You simply do an recursive classification. You start out with node per group, and then add the a supernode for the two closest nodes. In the supernode, store the best assumption, the size of its subtree and the variation in it. As many of your strings will be identical, you'll soon get large subtrees with identical entries. Recursion ends with the supernode containing at the root of the tree.
Now map the canonical names against this tree. You'll quickly see that each will match an entire subtree. Now, use the distances between these trees to pick the distance cutoff for that entry. If you have both Foo X1 and Foo Y1 products in the database, the cut-off distance will need to be lower to reflect that.