In e-commerce it is often crucial to provide customers a large choice of relevant offers. As short and incomplete queries prevail, appropriate expansion methods are desirable. This work describes a method for the automatic construction of a thesaurus based on existing categories of documents. A clustering algorithm, the "Layer-Seeds method", is introduced, which facilitates the automatic generation of thesaurus reflecting the specific vocabulary occurring in a given collection of documents. The clustering works on terms extracted from the documents in a certain category and organizes them in a tree-like hierarchical structure — a thesaurus. The thesaurus is then employed for automatic query expansion in an e-commerce application in order to obtain better results for product searching. Experiments yield evidence that a significant increase of user satisfaction is achieved.