how can i make sub categories in drop down menu.

If you go to
Dashboard > Appearance > Menus
one of the possible types of menu items is product categories. You may need to enable the section in screen options. Add your categories to your menu.

There’s a categories widget which can show categories as a dropdown I think but you would need a sidebar layout for that.

The way its supposed to work is that if you have lots of categories you wouldn’t have the products on that page. The Shop page would show categories only and the user would click a category to bring up a page of products in that category.

You could use some custom css to hide the category images:

.product-category-box img {
  display: none;
}

I don’t know of a plugin that would replace the categories with a dropdown. Hopefully someone else will know and can chime in.