How can we overcome fluctuating dollar values globally

[Norma Holt]

Anyone marketing products internationally may be aware of the enormous fluctuation in monetary values. A few days ago the $au wa worth $Us0.97 today it is $us0.61.

That means that what was almost parity last week is now almost half.

I was looking at joining a membership site for $us39.95/month and got a shock when this morning that converts to $au60, yesterday it was $55. Who knows what it will be next month if the $au drops more, so who wants to take the risk? There are many Aussies who would like to maintain membership in programs but in this situation I can see that many businesses will suffer because of it.

Australia apparently has more internet users per population according to a report of a few months ago. That means that we deal with many US and international businesses. Some of those businesses, as noticed on Ebay, appear to accommodate the difference in a helpful and generous way.

With the economy tightening, as it is doing globally, many Aussies will drop out of programs currently subscribed to.

With job losses increasing many may also turn to the Internet to try to make a living only to find they can's afford the programs they need to get going. So instead of turning these people away a clever marketer might want to attract them by offering the same deal in their own currency as that offered in $us. In other words if it costs $us10 then it could cost $au10.

That means that something that costs $us40 will cost $au40 and so on. With the technology available today it is possible to ensure that no one takes advantage of this and so what if they do? Isn't it better to get the business rather than turn people off?

I am interested to hear what other WF members think of this?

Are there other suggestions how this fluctuation could be overcome?

[Jared Alberghini]

The monetary system as we know it is due for a big change... or shall we say revolution...

- Jared

[Josh Anderson]

I have a partner who holds two accounts USD and EURO.

He holds the USD in down times and spends it in up times. He also avoids bad conversion rates this way.

With the technology available today it is possible to ensure that no one takes advantage of this...

Take advantage of what?

$1 USD = $1 USD

When the conversion rate fluctuates it does not mean that someone is "taking advantage."

It is unfortunate but just like you weigh your finances in AUD we weigh our finances in USD. We do not make any more money when your AUD is worth less. It just costs you more to buy a USD but the seller does not earn any more.

[Thomas Belknap]

Hi Norma,

I was out of the US for about a year and a half. In that time, I was hit with a declining dollar while getting all of my income in US dollars. Instead of concentrating on the declining dollar, I decided to concetrate of making more money. That way when the dollar increased I was in even better shape.

I would look at how you can increase your bottom line to afford that membership rather than trying to increase your purchase power.


Just a thought.

[Norma Holt]

Originally Posted by Josh Anderson

I have a partner who holds two accounts USD and EURO.

He holds the USD in down times and spends it in up times. He also avoids bad conversion rates this way.

Take advantage of what?

$1 USD = $1 USD

When the conversion rate fluctuates it does not mean that someone is "taking advantage."

It is unfortunate but just like you weigh your finances in AUD we weigh our finances in USD. We do not make any more money when your AUD is worth less. It just costs you more to buy a USD but the seller does not earn any more.

Josh, you are quite right. But as the USD increases for us we will naturally buy less from the US, which also affects your economy.
If US marketers can survive without selling to overseas people then they have nothing to worry about. But what happens when you our American friends cease to also buy for some reason.

Isn't it good policy to retain your overseas customers?

Look I am no economist and nor do I pretend to be but it strikes me that we are all heading into bad times and somewhere at sometime something is going to give. Isn't it better to be prepared up front.

I'll probably get shot down in flames by all the economists who are here but from I'm hearing from overseas most economies that affect us are being badly hit. Even China, and there are many marketers there, are suffering the global downturn.

I am probably not making myself clear enough to get my points across and would love for others to have a go. Especially if you are from a non US country and you deal with people on a global basis.

What are the programs that can accommodate this problem.

For instance, I sell my products in US dollars but that may become too difficult so why shouldn't I sell them in AusD. I would get the same no matter which country my clients reside in. But if I could make it easier for them to pay in their local currency isn't that a better proposition. i.e. that they pay only the same amount and not the converted rate.

Hope that makes sense.

[Thomas Belknap]

Originally Posted by norma

Josh, you are quite right. But as the USD increases for us we will naturally buy less from the US, which also affects your economy.
If US marketers can survive without selling to overseas people then they have nothing to worry about. But what happens when you our American friends cease to also buy for some reason.

Isn't it good policy to retain your overseas customers?

Look I am no economist and nor do I pretend to be but it strikes me that we are all heading into bad times and somewhere at sometime something is going to give. Isn't it better to be prepared up front.

I'll probably get shot down in flames by all the economists who are here but from I'm hearing from overseas most economies that affect us are being badly hit. Even China, and there are many marketers there, are suffering the global downturn.

I am probably not making myself clear enough to get my points across and would love for others to have a go. Especially if you are from a non US country and you deal with people on a global basis.

What are the programs that can accommodate this problem.

For instance, I sell my products in US dollars but that may become too difficult so why shouldn't I sell them in AusD. I would get the same no matter which country my clients reside in. But if I could make it easier for them to pay in their local currency isn't that a better proposition. i.e. that they pay only the same amount and not the converted rate.

Hope that makes sense.

You want sellers to reduce their price based on country of purchase.

Edited: If that is the case then why haven't you been doing this before? I am sure there would have been a lot of happy warriors that would have purchased more based on this.

[Norma Holt]

Thomas

You want sellers to reduce their price based on country of purchase.

Edited: If that is the case then why haven't you been doing this before? I am sure there would have been a lot of happy warriors that would have purchased more based on this.

Yes, I think that would make sense in this climate. But also people from outside US sell products based on the USD. That is where the problem is. For instance people in Europe who do this are missing an opportunity as the AusD, as just one example, is worth more in that currency than in USD. If you get my drift.

The big question is
1. what is holding the USD up when other currencies are
slipping?
2. it is surely better for trade to sell in other currencies?
3. its becoming harder for US to sell goods overseas because of this situation so those outside US can escape this by trading in currencies worth less.
4. so why wouldn't it be good for Americans to think along the same lines?

I was out of the US for about a year and a half. In that time, I was hit with a declining dollar while getting all of my income in US dollars. Instead of concentrating on the declining dollar, I decided to concetrate of making more money. That way when the dollar increased I was in even better shape.

Yes, but that was then. Because you reside in the US you are not in tune with the situation in other countries. I hold money in USD for purchases I make in USD and sure we make more money by selling goods in USD but the point is how long will people outside US be able to afford to buy in this currency when their own rates are going down at such a rate? Its not just about people who are making heaps its about all IMs and many are just starting out, others don't make heaps and many are struggling to just stay online.

Its a matter of thinking outside the square and leaving the comfort zone to ensure a future with satisfied clients who might otherwise leave, give up and never return.