Market places such as eBay, Amazon and Rakuten offer entrepreneurs the ability to start modest-sized businesses and target a global audience, not available on the high street or easily via their own websites. As international clients are sourced the perceived complexities of managing multiple currencies can become challenging. Fortunately, leaders in the deliverable currency sector now offer a number of etailer FX solutions which ensure the management and reception of foreign currency payment is fluid.
The emergence and growth of online markets have inspired a handful of companies such as Worldfirst and Currencies Direct to cater for e-tailers. Their platforms allow fast, efficient reception or clients payments in numerous currencies, allowing the online marketer to repatriate funds easily and competitively back to their base or operating currency. As one of the pioneers of this type of e-tailer offering they have a wealth of knowledge which spans many years and over a multitude of online marketplaces
Challenges faced by global e-tailers
Purchasing stock in foreign currency – If a company isn’t just receiving foreign currency payments but also making them in order to purchase stock from overseas sourcing the correct FX solutions can be vital, especially when buying in exotic currencies or during volatile markets or political instability.
Timing when making transfers can be key especially if your orders are in bulk as a negative currency movement will rear its ugly head when working out your companies’ quarterly profit, Thankfully Currencies Direct or similar will be able to proactively manage your currency purchase requirements and ensure that the variable of FX rates will not affect your company’s profitability.
On top of this proactive and consultative approach to our foreign currency transfers, you will also be afforded the possibility or eliminating your overseas transfers, with banks charging between £10-30 per transfer a company dealing regularly with multiple suppliers will see further cost orientated benefits.
Repatriating payments and maximising profitability – Once a strategy has been devised with your FX provider on how to manage your outbound foreign currency transfers you can then turn your focus to repatriating foreign currency payments profitability.
If repatriating foreign currency payments makes up a large part of your turnover or profitability ensuring a competitive way of sending these payments to your business should be a fundamental part of your companies. Typically, any payments exchanged between different foreign currencies on market places will incur a margin of roughly 3%. A slice of your profitability that could be allocated to fund growth or improve your business, an FX specialist will charge significantly less. In addition to the monetary saving, the efficiency offered by their staff and FX platforms remains unrivalled and Currencies Direct boast an enviable level of positive customer feedback with a rating of excellent on Trustpilot. They also offer the ability for e-tailers to open a multicurrency wallet-based account meaning you can collate currency reserves in numerous currencies.
Customer funds can be collected on your online platform as part of your FX solution and funds can be exchanged at a convenient or when the rate is beneficial. You also have the ability to use a portion of the collected Foreign currency to pay for company improvements or new stock, meaning you will avoid the applied margin to covert more currency.
As mentioned above, a proactive approach to a currency exchange can allow your online business to fund new initiatives and save money when rates move in your favour.
Superior rates currently available can be targeted via Rate Alerts and FX Market orders ensuring that you are contacted or ‘alerted’ to a beneficial rate and if an order is placed you automatically purchase the currency rate desired, potentially saving your business thousands, subject to the amount traded or FX movement. These hedging techniques can be applied both to FX transfers derived for money generated by international clients and company funds which are due being to be transferred.
Online retailers also have the ability to fix exchange rates for up to 1 year via a forward contract, meaning that if they want to fix the cost of foreign currency purchases, they can afford to do this for up to a year. Guaranteeing they know the exact rate they will exchange currency at for the year, they, therefore, will not be caught out by volatile FX markets and can devise their retail prices knowing their bottom line won’t be affected by adverse currency movements.
As online market places continue to grow as will the opportunity to sell to new and developing markets. Specialist FX companies remain extremely conscious of this and therefore the FX solutions available to e-tailers continue to evolve. A suitable FX solution for your online companies needs can, therefore, be financially rewarding as well as providing you with more time to focus on the growth and development of your business.