I am just wondering how many categories are too much? I am in Cell Phone Accessories business. How should I define the categories? How would you, as a customer, like to see? Any suggestion would be appreciated.

I'd guess no limit as long as its easy to navigate and your customers have a general idea of what they already want. For example. best buy and walmart may have thousands of categories but few people go to the site just to see what they have. Most people have some idea of what they want. It could be vaugue like "something cool for my camera" or specific like a charger for my gadget-3000.

Hey iNAisle.
The question is relative to the number of items and width of your product line. If you consider that Am@zon.com has 11 top level categories and they sell millions of products, that might be a place to start thinking about it.

You might want to check out some of the top ranked sites selling similar product to you and analyze their category structure.

There are a number of best practices though - make it simple for the customer to find what they want!
>Work to reduce the clicks between the home page and the purchase
>Dont use lingo or cryptic text for categories (often called "mystery meat navigation" - because you'll never know what you'll find when you click a link)
>Dont be too vague or too specific (tough one there)

You might also want to do some "focus group" testing...which can be done simply and quickly; often at no cost. Here is an example of what I've done in the past.
1. Get some note cards and write some top level category name ideas on them (1 on each card). Duplicate some categories, for example you might have 1 card as "batteries" and 1 card as "Samsung batteries" The idea is to create overlapping categories. (cell phone cases, flip phone cases, phone protection...etc)
2. Next write down products on some cards (30 or 40)...I've even cut out pictures and brief descriptions to paste on these cards
3. Gather a bunch of friends and feed them (martinis help too)
4. Lay out the category cards and have them (individually, in pairs, or as a group) stack the product cards below the category card that they believe would make the most sense

I've been able to hone and develop the nav structure of a number of sites this way. Every time I do this, I learn a ton - and often learn that my original assumptions were wrong. Had I just gone off intuition when setting the category structure, it would have made sense to "me"...but perhaps not to many others.

Good luck with it!

These results aren't up to the minute accurate, and I rounded them a little funny so they don't add up to 100%, but if you can ignore those factors here are the statistics.

Percentage of clients VS amount of categories

<10 = 19%
10-50 = 36%
51-100 = 16.5%
101-500 = 22%
501-1000 = 7%
>1000 = 2.5%

Interesting out the 10-50 is 36% and 101-500 is 22% but there's a large drop in the 51-100 range.

Personally I think a lot depends on what types of products you sell. If you sell clothes your category list may be shorter than someone that sells computer accessories and people expect that. For instance newegg.com may have 10 main categories but added up they have, let's guess, 200 actual categories. If you shop for computers, parts or accessories you will expect to search through a lot of categories to find what you need. If you look at a site that sells shirts for instance, they may only have 10-15 categories total (men/women/child > xs/s/m/l/xl/xxl/xxxl).

Consider what it is you are selling then find other sites that sell the same or similar things then act as a customer on those sites and take a look at their categories. Is it easy to find what you need? Are the categories confusing? Can you easily go from a sub category back one? I have to admit, my category list took me a long time to adjust and I'm not even sure it works in its present state but with so many options in my product line I still can't decide what to have as my categories.