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In basic understanding a sitemap displays the pages of your site on one page. It makes it easier for search engines to crawl through your site. It allows the spiders to locate all pages and all Url’s listed. Search engine spiders can now crawl your site at a easier and faster rate. Not only is it easier for search engines, it also makes it easier for visitor to search through your site and find exactly what they are looking for.

With a website that contains 100’s of pages of useful content, it is extremely important to have a sitemap. But some SEO guru’s have said that if you have multiple pages, DO NOT have more than 40 or so pages on your site map. With having too many pages search engines can view your site as being a link farm, which can ultimately hurt you in the long run. Being able to browse your site the quickest way will help keep possible customers on your page. The easier it gets for visitors means a better chance for a possible sale.

Another important thing is to always update your sitemap. Each page you add to your site, try and update your sitemap. Make sure your sitemap is linked from your homepage.
Here is a very useful tool to help create your sitemap; www.xml-sitemaps.com/