Are UK Warriors Less Profitable?

by 37 comments
I just thought of this and wondered... Are UK Warriors less profitable than US Warriors because of the exchange rate?

Here's my thinking:

I'm assuming the US is the largest market, at least that's what I heard on a DVD by an Aussie marketer. If you sell to the US market then your prices are probably in line with US marketers.

If a UK marketer sells a $47.00 ebook that is sold in the US he/she would end up with less buying power than if a US marketer sold that same $47 ebook. The same with graphics, services, etc.
#internet marketing #profitable #warriors
  • Profile picture of the author Neil Morgan
    Hello Scott

    I'm in the UK and sell products in dollars to US customers via PayPal.

    Because of the current exchange rate I'm making more UK Pounds than before. When I withdraw PayPal funds (in USD) to my business bank account (in UKP) I get more UKP now than any time since May 2006.


  • Profile picture of the author clogmoney
    It's a double edged sword really. Our pound is greater in value so we can buy things which are valued in dollars for relatively cheap. Traffic being a good example. (Note that you need a bank account which doesn't charge you for foreign transactions.) Unfortunately the other side of the sword is that if you are selling products which are valued in $$$ it feels like you are getting less. It's all relative my friend, just concentrate on making as many $$$/£££ as you can
    • Profile picture of the author JayXtreme
      I don't think UK warriors are less profitable...

      It's all relative because the living expense value in $$/££ terms is directly proportionate.. I have found.. being on both sides of the pond.


  • Profile picture of the author Carol J Smith
    I live in the US an it seems that all of our economic news is bad news. I don't think we're any better off.

    • Profile picture of the author Neil Morgan
      Are you sure, Neil?

      Product price: $100

      Today (26 Sep '08), PayPal will give you 53p per dollar (£1 = $1.88), so you'll get £53.00 when you withdraw the $100 to your UK account.

      Earlier this year when £1 = $2.00 you would only have got £50.00 when you withdraw.

      And it has actually been worse than that (eg £1 = $2.05) - you got less than £50.00 for your $100.

      I've been monitoring this since 2004.

      Of course, if you buy a lot of stuff from the US then you'll eat up that gain.

      I find that with the recent weakness of the US Dollar relative to the pound
      ..which means that you get more pounds for a dollar. And, of course, the opposite is true - if you go on holiday to the US, you'll get less dollars when you convert your pounds to dollars.


  • Profile picture of the author Cash Blasters Online
    It's all how you look at things, I kind of think the people in the UK are taxed higher so, who's ahead and who's not, maybe we should study this?
  • Profile picture of the author Warrior Markets
    Alexa, hi

    I think the confusion between you and Neil stems from the time frame you're looking at. Certainly, in terms of the last 5 years, etc, the pound is strong compared to the dollar. However - and I think this is what Neil was referring to - the pound was much stronger only 6 months ago.

    So, for example, 6 months ago, if you took £200 with you on holiday to America, you would've got $205 for it; now, if you take £200, you will get about $185.

  • Profile picture of the author Chris Lockwood
    Originally Posted by Scott Ames View Post

    If a UK marketer sells a $47.00 ebook that is sold in the US he/she would end up with less buying power than if a US marketer sold that same $47 ebook. The same with graphics, services, etc.
    $47 is still $47 regardless of the exchange rate. I don't get your logic.
    • Profile picture of the author Neil Morgan
      Hi Alexa

      I think you made a little mistake here.
      Do you? I'm open to being convinced, and to finding that my years at university studying for my degree in Mathematics were a waste of time!

      Why not post an actual example (with numbers) using your logic...?



      [Edit]: WM's right - maybe we're looking at different timeframes. That's why an example would help.

      The recent weakness of the US dollar relative to the pound means that there are more dollars/cents to the pound than before.
      Not compared with earlier this year. There were $2.00 per £1.00 earlier this year. Now there are only $1.88 per £1.00.

      That's certainly what it means to all the Londoners who'll do their Christmas shopping in New York this year, anyway.
      Last December they would have got $2.05 for each £1.00. At current rates they'll get $1.88 per £1.00. So they'll be getting 8.3% less goods for their £1.00 than they got last year.
    • Profile picture of the author Kim Standerline
      Originally Posted by Chris Lockwood View Post

      $47 is still $47 regardless of the exchange rate. I don't get your logic.
      yeah it is if your own currency is $ but if you use another one usually such as sterling, it makes a lot of difference

  • Profile picture of the author Jeff Usher

    Lets say I receive $45 in my paypal account and send that to my UK bank account. At the exchange rate today:-

    $45.00 = £24.50 ( 1 GBP = 1.83690 USD )
    ( 45 / 1.83690 = 24.5 )

    A while ago the exchange rate was 1 GBP to 2 USD so:-

    $45.00 = £22.50
    ( 45 / 2 = 22.50 )

    So, looks like I "lost" £2 on that sale due to the exchange rate.

    The lower the exchange rate the more £ we get. So lets say tomorrow the exchange rate goes down to 1.5. We would be better off:-

    $45.00 = £30.00 ( 1 GBP = 1.5 USD )
    ( 45 / 1.5 = 30.00 )

    Hope this helps........


    • Profile picture of the author Martin Avis

      Why do you persist in making yourself look silly?

      Neil is correct. You are not.

      Unless of course you are argueing a completely different point to the one that is being discussed here, which I suspect you might be.

      To go back to the OP. UK marketers ARE at a disadvantage compared to US ones. Not because of the exchange rates per se, but because of the cost of living in each of our countries.

      A US marketer making $5000 per month will find that their money buys a much bigger basketful of goods than a UK marketer making the same dollar income. Most products and services in the US are much cheaper than they are here in the UK. Gas (petrol) for example, is about twice the price in the UK than US motorist pay. They don't call us Rip-Off Britain for nothing!

  • Profile picture of the author Diana Lane
    It's no exaggeration to say that maths was my worst subject at school, but although I'm the only person I know who can add two figures together and come up with something less than either of them, even I know when I'm seeing more money. Not so long ago, a $99 transaction brought me fifty quid. Now it brings me around fifty-three, give or take the odd few bob.
    • Profile picture of the author Frank Donovan
      Martin is right.

      I have to smile when I read about the sort of income considered "rich" by some non UK marketers, when that would scarcely pay the average rent/mortgage where I live.

      The pound has been very strong against the dollar for the last couple of years, so the current slight movement the other way is a welcome bonus.

      Where we do benefit is with online services, such as hosting, domain registration, software memberships etc which are usually US based and much more cost-effective for UK marketers.

  • Profile picture of the author Roger Mayne
    I certainly think that UK Warriors are at a disadvantage over their US counterparts, when it comes to selling in US$, but as said earlier, we can leverage that by buying hosting from US providers, which effectively makes running costs cheaper for us.

    At the moment, with 'credit crunch' and 'global recession' as hot topics, I'm just happy with ANY sale in ANY currency!!
  • Profile picture of the author naonline
    I think Jeff explained it perfectly.
  • Profile picture of the author Adam Carn
    I remember a few years ago (I'm gonna be a bit vague so don't pounce on me ) you would get something like £75 from $100. Then it sank to around £50 mark and even though with the recent fluctuations the rate still remains around £50. I think that's what Alexa is trying to say.

  • Profile picture of the author clogmoney
    Haha this thread made me laugh for several different reasons
  • Profile picture of the author John Hillage
    I sell in US $ and also have my Adwords account as US - so instead of 5p minimum bid (about 10c) I can use 5c minimum bids - so I guess it evens itself out.
  • Profile picture of the author Jean Morgan
    I am with Neil, Martin et al.

    The US $ has been very weak against the pound for a couple of years. Since January this year it strengthened about 10% but has now weakened slightly again over the last 2 weeks.

    For the last 2 years it has been great buying goods and services from the US but not so good on $ based earnings. Recently our dollar based earnings have been increasing in value over the last 6 months or so to have dipped again this last two weeks but not anywhere near the levels of January this year when the rate was roughly $2 = £1. I have recently received as low as $1.74 = £1


    It is correct to say that things are relative to the cost of living of the various countries. I find there are few places I have ever travelled where I have found prices to be more expensive than the UK. When in the USA in June I was laughing about the cost of car rental and fuel for it. Also buying food in restaurants was incredibly good value particularly with the huge portion sizes. Clothing was also very cheap and of good quality.

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