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If I have one category
With its products
Now I have another category
But basically it also has similar products
What's the best way to deal with the similarity for SEO purpose?
Do I just use the same structure as above or is there a better way?
The challenge with the structure you mention is that it could lead itself to "duplicate" content for search engines, and search engines might be forced to "choose" a category, skewing traffic towards this category. Have you considered differentiation by content? Ie making sure you uniquely describe/add text for long sleeve tshirts and jersey t shirts?
However, if you do choose to invest effort in structuring the site so that the categories do not compete with each other, I would recommend using a super category (eg "shirts"), and then have breadcrumbs which help users and search engines understand hierarchy and navigate to products.
