After the bid amount is finalized, the player who won the bid translates those IPC’s to units, IPC’s for one or both Axis powers, or a combination of both. The player must state where the units are placed and then places them prior to game start.
An example - a player wins the bid with 7 IPCs. The player decides to divy it up by placing 2 INF in Libya and giving 1 IPC to Japan. Thus, Germany would now start with 3 INF, 1 ARM in Libya and Japan would have 26 total IPC’s to spend on its first turn.