# Budget allocator — Ecommerce

The budget allocator with three columns a store needs: which slice of the catalogue a share belongs to, the margin on that slice, and how much of the total is being held back for a promotion rather than committed now.

Everything else is the general allocator, unchanged. One row per destination, a basis for every share, a floor and a ceiling, and a reallocation rule written before it is needed.

## How to use it

1. Copy this file, or the CSV version if you would rather work in a sheet.
2. List the destinations first, at the level the argument is actually being had.
3. Write the basis for each row before the number, and keep measured performance, bets and commitments in separate rows.
4. Set floors before shares: a destination that cannot clear its floor should not be in the split at all.
5. Fill Share of total so the column sums to one whole, per currency.
6. Write the reallocation rule now, while nothing is going wrong.
7. Re-argue each row on its own cadence, and record what changed and why.

## The columns

**Allocation name** (Text). What this split is called and the trading period it covers: a season, a quarter, the run up to a peak. The same name goes on the review, so a decision can be traced to the argument behind it.

**Destination** (Text). What the share goes to, at the level a store actually argues about: a catalogue segment, a channel within one, a promotion reserve. One destination per row.

**Basis** (Text). What the share rests on: measured performance from your own account, a bet on a new part of the range, a commitment to clear stock, or a floor somebody insisted on. Keep the four in separate rows.

**Share of total** (Percent). This row's proportion of the season's budget. Read down the column and you see which part of the range the quarter is actually about, which is the decision this document exists to make visible.

**Amount (minor units)** (Integer). The share as money, in the smallest unit of its currency, as a whole number, so a season's rows sum to the figure the trading meeting approved rather than to something a cent adrift.

**Currency** (ISO 4217 code). The ISO 4217 code this destination charges in. Shares are proportions of one currency's total; a store selling into several markets needs a split per market rather than one with a conversion in it.

**Floor (minor units)** (Integer). The least this segment can hold and still produce a readable cost per order. Below it a segment spends, reports, and tells you nothing, which is worse than not funding it at all.

**Ceiling (minor units)** (Integer). The most this segment can absorb before the money stops reaching new buyers. Blank where it is unknown; write unknown rather than leaving the cell empty, because an empty cell reads as unlimited.

**Reallocation rule** (Text). What has to be true for money to move into or out of this row, and how much may move at once. In a store the condition should span two weeks, because a single retail week is mostly noise.

**Review cadence** (Text). How often this row is re-argued. Weekly through a season, because stock and offers move weekly and a share that made sense before a sell-out rarely survives one.

**Evidence** (Text). What the share rests on, named: the baseline window from your own account, the margin for this segment, the stock cover behind it, the sell-through date a clearance row is committed to.

**Owner** (Text). The person who defends the size of this row. For a catalogue segment that is usually the trading manager rather than whoever spends it.

**Notes** (Text). What the next person needs: the segment whose margin is still unknown, the reserve held for the peak, the clearance row that exists because stock has to move rather than because it performs.

**Catalogue segment** (Text). The slice of the range this share is for: best sellers, new arrivals, a hero product, the long tail, clearance. It is what makes two identical amounts mean different things.

**Gross margin** (Percent). The margin on that segment after discount and after expected returns. It sets what an order can cost to win, and therefore whether this share is generous or tight.

**Promotion reserve** (Text). How much of this row is being held back for a promotion rather than committed now, with the window it is held for. A peak that was not reserved for is funded by cannibalising what works.

## The budget allocator

| Allocation name | Destination | Basis | Share of total | Amount (minor units) | Currency | Floor (minor units) | Ceiling (minor units) | Reallocation rule | Review cadence | Evidence | Owner | Notes | Catalogue segment | Gross margin | Promotion reserve |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

## Before you commit it

- Every row names a catalogue segment and its margin, or says the margin is not yet known.
- Shares sum to one whole per currency.
- Every row has a floor, and no segment is funded below it.
- The promotion reserve is set before the peak, not taken from working lines during it.
- Every row has a reallocation rule written before it was needed.
- Clearance and full-price segments sit in separate rows.
- Anything that is an assumption says so, in Notes, in words.