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Breadth over Depth. Wide top level navigation is better than deeply nested hierachy. (more)

It is easier for users to scan a list of categories than to navigate into a deep hierarchy.

As a rule of thumb, it is OK for category to have up to 15 subcategories. Conversely, it is suboptimal to have deep hierarchy where each category has only 2-4 subcategories.

Drag and Drop. Edit your category tree by dragging and dropping categories. Dragged category will become a child of the category it is dropped on.