Are you building an ecommerce business? Each Thursday, Kevin Sanderson shares what he has learned going from a full-time corporate job to being an independent, full-time ecommerce entrepreneur. Follow along as Kevin shares what he has learned selling on Amazon in eight different countries and brings on subject matter experts to help you build an ecommerce business that you can be proud of.Read more »
Are you building an ecommerce business? Each Thursday, Kevin Sanderson shares what he has learned going from a full-time corporate job to being an independent, full-time ecommerce entrepreneur. Follow along as Kevin shares what he has learned selling on Amazon in eight different countries and brings on subject matter experts to help you build an ecommerce business that you can be proud of.Read Less
Do you get nervous when you consider expanding your ecommerce business into an international marketplace due to the headache of understanding how foreign currencies work? While foreign currencies can be confusing at times - there is no need to fear them!
Just like a lot of ecommerce concepts - you’ve got to learn foreign currencies work to remove those fears. Thankfully, Kevin had the opportunity to sit down with Payoneer’s Strategic Partnerships Manager, TJ Hyland to unpack the complexities of foreign currencies for sellers like you. You’ll want to have pen and paper handy as TJ provides his helpful perspective on this often confusing topic. Don’t miss it!
How exactly does currency work? Who sets it, and why does it fluctuate? Currency and currency exchange rates are set by a mixture of government and market parameters. The stronger a country’s economy and standing in the world - the more weight that currency has in the international marketplace.
Currency exchange rates use to fluctuate when government economic data would take a positive or negative turn. Recently - over the last couple of years - currency exchange rates have taken a more unpredictable pattern. Not only does global economic news impact a currency exchange rate, but social changes can influence them as well.
While it may be tempting to speculate and stress about the currency exchange rates - TJ Hyland says that approach is unproductive. Exchange rates may fluctuate between 15% and 20% in the countries that you operate in - don’t stress about it - eventually, they will stabilize.
Bottom line - keep an eye on the economic and social news coming out of the country you are selling in but don’t let it keep you up at night. For an even deeper dive into foreign currencies and how sellers like you can stay in the loop - make sure to listen to this episode featuring TJ!
How do you know what the current exchange rate is for the currency you have earned in an international marketplace? Can you just Google what the exchange rate is and factor that into your profit margins? Unfortunately, the answer is no. When you google a foreign currency exchange rate, you’ll get the interbank rate. The interbank rate is the foreign exchange rates paid by banks when they trade currencies with other banks.
When you are looking at the exchange rate that you’ll need to factor in for accounting purposes - you’ll need to consider a 3.5% - 4.5% additional fee to cover the costs of converting your funds. Unfortunately, most marketplaces like Amazon don’t spell out their costs for converting your funds in a clear and concise way.
Now that you have a stronger grasp on how foreign currency and their exchange rates work - the critical factor comes into play - how to maximize your effort. You work hard to make the most out of every aspect of your ecommerce business - don’t leave money on the table when it comes to foreign currency!
Thankfully - there are amazing currency solutions provided by folks like Payoneer. Payoneer enables millions of businesses and entrepreneurs from all over the world to connect with each other and grow globally through their cross-border payments platform. With Payoneer’s fast, flexible, secure and low-cost solutions, marketplaces, networks, and businesses throughout the world can pay and get paid globally, as easily as they do locally.
If you want to know even more about maximizing foreign currencies - listen to this full episode with Kevin and TJ!
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