Are you selling goods on international marketplaces? Or, perhaps, you’re considering it in the future?
If so, it pays to know how it can affect your profit margin resulting from the volatility of currency rates.
Though advantageous to your business, selling on international marketplaces comes with some challenges, if not difficulties, so to speak.
It has many grey areas which sellers seem to just take for granted.
Little do they know that it could make thousands of pounds worth of difference to their total earnings.
In order to keep you from experiencing the pains which many have had to endure in terms of their overseas payments, we consulted World First.
The UK-based company specialises in foreign exchange and how it affects internatiional money transfers.
After a lengthy conversation with them, here’s what we’ve managed to produce for you.
Monitor Exchange Rates
Most online marketplaces would automatically transfer funds to your bank account based on a fixed schedule.
That may seem beneficial on your part, but in reality it makes you vulnerable to the foreign exchange market, as payments to you are automatically converted to your local currency.
Through the conversion process, you lose a large amount of money resulting from the extra fees apart from volatile currency rates.
Exchange rates are constantly fluctuating, which can make a real difference to the final amount you bring home. Let’s take a look at an example of a UK-based vender selling into France.
Take for example the case of euro against the pound.
In the first quarter of 2016, the value of the euro to the pound was 0.7375, so for every euro the equivalent value in pounds was £0.74.
However, November saw the euro increase in value to 0.903.
The ever-changing currency rates don’t only make pricing your goods for international marketplaces a tedious task, they also leave you uncertain with your profits.
Don’t Pay More than You Should
The manner by which payments from overseas marketplaces are processed differ, depending on the marketplace that you’re selling on.
Some marketplaces would pay you through the bank, but others have a clear-cut process, which is more often than not beneficial to them rather than the sellers.
Before you agree to a marketplace’s payment method, ask them the overhead for fund transfer.
The reason for that is many of them may not ask for an upfront payment, but you will find out later that the exchange rate which they offered you comes with hidden, if not inexplicable, fees.
Did you know most marketplaces and banks can charge up to 4% for currency connversion without letting you know?
If you’re a third-party seller on Amazon, I bet you’ve come across the phrase, “All fees and charges related to your use of Amazon Currency Converter for Sellers are included in the exchange rate” in their international disbursement tool, Amazon Currency Converter for Sellers: .
Consult a Foreign Exchange Company
In order to receive the actual amount of payments for goods you’ve sold on international marketplaces, the best option for you is an expert in currency exchange and international payments such as World First.
Through them, you can have access to a free international receiving account which enables you to receive overseas payments in your country’s local currency.
By adding the account details to your seller account in whichever marketplace that you’re selling on, you will be able to receive your overseas payments based on the marketplace’s payment schedule.
You are free to decide when the transfer should be made since there is no currency conversion.
Because you need not pay any exchange rates, rest assured you get to bring home the actual earnings from the sales you made.
You may visit World First’s site to take advantage of their free rate alert service. Better yet, sign up with them to gain access to a free international receiving account.
Selling internationally is no doubt an opportunity which entrepreneurs like you shouldn’t miss, but it also comes with a lot of challenges.
However, being aware of the additional fees – whether declared or hidden – that come with the payments you receive from overseas marketplaces will spare you from losing hard-earned money.
Article Source: How to Manage Overseas Marketplace Payments