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Help with categorizing

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Hi,  when I'm creating my inventory listings, I have two categories I put items under.  One is "New In Store", the other is "Dresses" or whichever garment it happens to be.  When I go on my website as a customer, and go to "Dresses", I am not seeing the products I had marked as this in this section.  The products will show up under "New In Store" though.  Is it only the first chosen category that will determine where your product shows to your customers?  Any help is appreciated!

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