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Hello,

There are a few questions I would like to ask to get a better idea of your situation.

1. Do you only run an e-shop? So you only sell your products online, no physical store?

2. Do you actually sell the products or your doing affiliate marketing?

In most cases, I wouldn't actually put it on my e-commerce site because having advertisements on your store seems unprofessional.   The only place I would actually put ads would be in the blog section.

Hello,

Was it a inner page that was ranking for the key phrase before? In the Google Webmaster tool were there any warning messages?  After Google's latest algorithm changes for 'over optimised seo' I've actually seen a few sites being punished for single keywords.

Hello,

No problem.

That should be located in .htacess folder where the old site,  www.organic7thheaven.com is located.

Hello,

I think you would do the following and put it in the old .htacess file.

Redirect 301 /products http://www.7thheavennaturals.com

Does your new site have the same products as the old folder? because if you 301 re-direct the links to the homepage, there isn't going to be much link value to it since it's not really related thus those links will most likely be removed from the search results.  If you have similar products on your new site, you should do a 301 re-direct the url's individually to maintain the link juice/value (as it is most relevant).