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Using a very simple example with cars, this seems to make more sense:

site.com/cars/audi/convertibles/red/

But since a person is likely to search for red convertible or red audi convertible, would it be better to have:

site.com/cars/red-audi-convertible/
site.com/cars/audi/red-convertible/
site.com/cars/audi-convertible/red/

Would these make a difference in my SEO?

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look at google analytics URL drilldown. How many levels do they offer? –  Neil McGuigan Jul 28 '13 at 4:41

2 Answers 2

up vote 3 down vote accepted

This video from Matt Cutts describes the SEO effect and user-impact of the URL variations that you're contemplating: Is it better to have keywords in the URL path or filename?

According to that, there wouldn't really be any SEO advantages for one URL over the other. However, users can more easily identify (i.e., read) shorter directory names, and hence are more likely to click on them in your SERP.

So considering this, your first URL seems to be the clearest one:

site.com/cars/audi/convertibles/red/
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Google uses the URL to generate breadcrumbs: https://support.google.com/webmasters/answer/185417?hl=en

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This only applies if you've marked up your breadcrumbs this way. It isn't necessarily related to the actual URL structure. –  Andrew Lott Jul 11 '13 at 22:01

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