Sometimes I dilute it as I go - just add half a teaspoon (about 2g) to my water and stir it through before adding the lye. But because it weighs so little it's actually easier I find to make up a litre or two and freeze it. What I find works really well is to make it up as double strength and freeze it that way. Let me explain:
5g powder (200x) makes 1 litre, so 10g powder makes 2 litres. I make 10g powder with only 1 litre of water and weigh it out into 160g baggies (it fits into a snack size ziplock), then freeze them. My usual batch of soap uses 320g water, so when I want to make a batch, I pull out one bag of 160g aloe concentrate from the freezer and bang it on the side of the sink to break it up a bit, then drop it into my mixing jug. Then I pour over 160g of distilled water. Then i mix in my lye. Having half ice and half water suits me well so that the lye solution doesn't get too hot.