Before you build a single campaign, decide what you are willing to spend per day on this product. **Everything downstream depends on it** — how many campaigns you run, how many keywords you can afford to target, and how fast you can buy the data that tells you what is working.

**A bigger starting budget is genuinely better**, because it buys data faster and gives you room to push the campaigns that matter and starve the ones that do not.

**But there is one hard constraint: your inventory.**

[Watch the walkthrough](https://kb.trackiq.com/kb-assets/kbvideo-ppcbudget-explainer-3c28ba1d.mp4)

*Prefer to watch? One hundred and fifty-two seconds on working out whether inventory constrains you, converting cover into a daily budget, and tapering in the right order.*

## **First, is inventory a constraint?**

**Compare units on hand against your current daily sales.**

**10 units a day and 500 in stock** — that is 50 days of cover. **Inventory is a constraint.**

**10 units a day and 5,000 in stock** — 500 days. **It is not.**

**And factor in lead time.** Manufacturing domestically with under 30 days of lead time is a different problem from 90 days of ocean freight from Asia — see [**Inventory Forecasting and Purchase Orders**](https://kb.trackiq.com/hc/knowledge-base/articles/inventory-forecasting).

**This single question decides which of the two paths below you are on.**

## **Path A: inventory is not a constraint**

**Pick a daily budget per product that you are comfortable with. $100/day or more is the recommendation.**

**Hold it flat for 30 days.** Changing the budget weekly makes the result unreadable.

**Then one of two things has happened:**

**Sales went up.** Good — now adjust the budget per product based on what each one returned.

**Sales stayed flat.** That is a conversion problem, not a budget problem. More spend on a listing that does not convert buys more of the same result. **Look at price first** — see [**Pricing and Gross Margin**](https://kb.trackiq.com/hc/knowledge-base/articles/pricing-and-gross-margin).

## **Path B: inventory is a constraint**

**Here you deliberately do not sell as many units as you can.**

**1,000 units with a 90-day manufacturing lead time means pushing for 30 sales a day empties you in a month** — and then you are out of stock, which costs rank, costs the momentum you just paid for, and takes months to recover. See [**Going Out of Stock**](https://kb.trackiq.com/hc/knowledge-base/articles/going-out-of-stock).

**So work backwards from cover, not forwards from ambition.**

### **The calculation**

**Maximum sustainable daily sales = units on hand ÷ days of cover you need.**

1,000 units ÷ 90 days = **11 units a day**.

**Then convert that into a budget.** The daily spend you can afford is the gap between your gross margin before PPC and your target margin, applied across those units:

**Daily PPC budget = max daily sales × price × (gross margin before PPC − target margin)**

**Your gross margin before PPC comes from your pricing table** — see [**Where Your Margin Actually Goes**](https://kb.trackiq.com/hc/knowledge-base/articles/where-your-margin-actually-goes).

**If that number comes out below $100/day, use $100 anyway** as a minimum for the next 30 days, or until you hit your maximum sustainable daily sales. Below that, campaigns take too long to accumulate readable data.

## **Then taper, in the right order**

**Watch the 4–7 day average, not a single day.**

**1,500 units, 90-day lead time, calculator says 17 units a day is your ceiling.**

**Start at $100/day.**

**When the 7-day average reaches 15–20 units, start easing off.**

**And do it in this order:**

**1. If you cut price for the launch, raise it back first** — roughly $1 a week.

**2. Then reduce the PPC budget.**

**Price first, because a price rise improves margin on every unit while a budget cut only reduces spend.** Doing it the other way round leaves you selling at a launch price you no longer need.

![Sales pace against what your stock can sustain](/kb-assets/shot-prod-table-6c206b.png)

**Tracking daily run-rate against remaining cover per product is the check that tells you when to taper** — see [**Monitoring Inventory Against Sales**](https://kb.trackiq.com/hc/knowledge-base/articles/monitoring-inventory-against-sales). Doing it by exporting inventory and sales reports and reconciling them by hand is how the taper gets missed until you are already out of stock.

## **The point you are steering toward**

**When sales stabilise at your sustainable ceiling and the budget is coming down, that is the moment the product starts making real money.**

**It is also the moment to place the next inventory order** — because the constraint that shaped this entire plan is the thing you are now in a position to remove.

## **Common mistakes**

**Deciding the budget after building the campaigns**, so the structure does not fit the money.

**Ignoring inventory**, and buying sales you cannot supply.

**Starting too small.** A thin budget spreads across campaigns so slowly that nothing produces readable data.

**Changing the budget weekly** in the first 30 days, and never learning what it did.

**Treating flat sales as a budget problem** when it is a conversion problem.

**Cutting spend before raising price** on a product you discounted for launch.

**Waiting until stock is nearly gone** to place the reorder.

## **Related**

- [**Preparing a Launch**](https://kb.trackiq.com/hc/knowledge-base/articles/preparing-a-launch) — what this budget funds.
- [**Setting Target TACOS per Product**](https://kb.trackiq.com/hc/knowledge-base/articles/setting-target-tacos-per-product) — the efficiency target the budget runs against.
- [**Monitoring Inventory Against Sales**](https://kb.trackiq.com/hc/knowledge-base/articles/monitoring-inventory-against-sales) — the signal that tells you to taper.