How to Allocate Your Ecommerce Advertising Budget Across Platforms

How to Split Your Budget Without Guessing

One of the most common questions I get from ecommerce sellers is "how much should I spend on ads and where?" The answer depends on your specific products, platforms and margins — but there is a framework that works for most sellers starting out.

Start With Your Profit Margin

Before deciding how much to spend on advertising, you need to know your actual profit margin per product after all costs (product cost, shipping, platform fees, packaging). If your margin is 40%, you can afford to spend up to 40% of revenue on ads and break even. Most sellers should aim to spend 15-25% of revenue on advertising to maintain healthy profitability.

The 70/20/10 Framework

For sellers on multiple platforms, I recommend this starting allocation: 70% on marketplace ads (Amazon PPC, Etsy Ads, eBay Promoted Listings), 20% on social media ads (Facebook, Instagram, TikTok), and 10% on testing new channels or experimental campaigns.

This ratio works because marketplace ads have the highest conversion rates and most predictable returns. Social ads build your brand and audience. The 10% testing budget keeps you exploring new opportunities without risking core performance.

Budget Per Platform

Within the 70% marketplace allocation, distribute based on where you generate the most revenue. If Amazon accounts for 60% of your marketplace sales, it should get roughly 60% of your marketplace ad budget. Do not spread budget evenly across platforms — weight it towards your strongest performers.

Minimum Viable Budgets

Each platform needs a minimum budget to generate meaningful data. For Amazon PPC, I recommend at least £10-15 per day per campaign to get enough clicks for optimisation. Etsy Ads needs at least £5-10 per day. Facebook ads need at least £10-20 per day per ad set. Below these thresholds, you are not generating enough data to make informed decisions.

When to Reallocate

Review your allocation monthly. If Amazon PPC is delivering 15% ACOS while your Etsy Ads are at 40%, shift more budget to Amazon. If a new TikTok campaign starts outperforming everything, increase its share. The allocation should be dynamic, not fixed.

Seasonal Adjustments

Increase your total ad budget by 30-50% during peak seasons (Q4, Valentine's Day, Mother's Day, etc.). Competition increases but so does buyer intent. Cutting back during peak season means missing your most profitable selling periods. Plan your increased budget in advance so you are not scrambling.

Want a Custom Budget Plan

Every business is different. I can review your current advertising across all platforms and create a tailored budget allocation plan based on your actual data, margins and growth targets. Get in touch and I will put together a recommendation.