Organizing Your Content
The number one goal of structuring your site should to allow your visitors to easily navigate from the home page to the exact information they want to find. Proper site structure is important because you want your users to be happy and satisfied. Happy, satisfied visitors convert. Frustrated visitors leave your site, never to return.
So, what is the best way to organize your content? You want to create a funnel that takes them from a general area and narrows it down to a highly targeted, specific page on your site. Each click a visitor makes needs to take them to a page that exactly matches what they expected to find when clicking that link. Each click should narrow their options until they reach their final destination.
Home Page (Tier 1)
Most users will visit your homepage at some point. What your homepage should do is tell the visitor what your site is about and serve as a starting point to finding more specific information. You need to make it extremely easy for people to find what they are looking for from your homepage and you do this with your main navigational links (or main menu).
What are people going to want to do on your site? What are the most common questions they will want answered? When you know the answers to these questions you can look at your homepage and see how easy it is for a visitor to find what they are looking for.
Categories (Tier 2)
Your homepage should link to each category you have on your site. I prefer to create a landing page of general information covering each category, but if you are using a WordPress site you can use links to your category archives that list every post you have created under that category.
Obviously create as many categories for your site as you need, but you will want at least three links in your main menu. If you get too many categories that you are linking to you might want to see if there are any opportunities to consolidate.
Content Pages (Tier 3)
Your important content resides in this tier three section and is linked to from your category pages. Using my site as an example a user can easily go from the homepage to the "Search Engine Marketing" category and then from that category page to this article on organizing content. For content sites like mine their third tier will be the actual articles, but in an ecommerce store this tier would contain the product pages.
Deep Content (Tier 4 & Beyond)
If you site grows large you may add tiers. Using the example of an ecommerce store, a product page may link to reviews, color choices, different styles, etc.
Tailor This Structure to Your Needs
As you organize your content keep the user's navigation in mind and go from general to specific. Use this as a basic guide, but if you are in a targeted niche your site might essentially be a "category" of a larger site. You may only need to go two levels deep.
If on the other hand you run a large site you might need categories within categories and can get a very deeply tiered site going.