Identify why visitors come to your site. You probably have a pretty good idea of what people want already, but check your web analytics:
What search terms do visitors use before they get to your site? Keywords used by incoming visitors tell you what your visitors were looking for before they clicked through to your site. Follow up to see which pages they visited – did they find what they were looking for?
If you’re tracking internal site search, what search terms do visitors use once they’re on your site? On average, only 10% of visitors use site search. So, it’s safe to assume that most people only use site search if they have a hard time finding what they want with your navigation. What terms are visitors searching for? Do you have that page? Is it hidden?
What pages on your site get the most traffic? If those are the pages that you want to get the most traffic, keep those in mind as you build your navigational structure to make sure they’re easy for visitors to find. If they aren’t particularly high conversion pages, what’s a similar page that you can steer those visitors to?
What are your top exit pages? If they’re locations or external contact information, that’s probably something a lot of your visitors are looking for. You should include that in your top navigation. Best Website Design Gets You To The Top
Divide your products/key pages into categories.
Usability experts recommend “card sorting”: put your products on cards, lay them out on a flat surface so you can see them all, and cluster similar items together. There are also a few websites out there that will let you sort cards without taking up so much floor space:
Keep in mind that a product can be in two categories at once.
Come up with names for those categories.
Use Google AdWords Keyword Tool or the keyword tool of your choice and see how popular those categories are
Enable SEOmoz’s toolbar and search for those keywords. Look at your potential competition.
Find the happy medium between keyword popularity and competition: there are your categories.
Put those categories in the universal navigation. If it runs across the top, the rule of thumb is to keep it under seven links. If it’s on the left, you can probably have more, although I wouldn’t go over twenty (Amazon uses 16).