Are UK Warriors Less Profitable?

by Scott Ames 37 replies
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.
#main internet marketing discussion forum #profitable #warriors
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  • 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.

    Cheers,

    Neil
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  • 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
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    • 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.

      Peace

      Jay
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      • Profile picture of the author KenJ
        I think there is no difference.

        Being in the UK might even help because everyone knows how honest and straightforward we are in business. No joke intended here.

        The vast majority of my customers come from outside the UK. In fact less than 10% of my visitors come form the UK

        I have no idea why but the stats tell me this and stats are never wrong are they?
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  • 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.

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

      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.

      Cheers,

      Neil
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  • 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?
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    • Profile picture of the author Don Alm
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  • 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.

    -WM
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  • 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.
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    • 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...?

      Cheers,

      Neil

      [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.
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      • Profile picture of the author KarlWarren
        I'm with Neil on this one...

        this year, my dollar earnings are the same, but my £ earnings are more. For the sake of simplicity I approximate my earnings by dividing the dollar amount by 2 (which it was for the early part of this year) - now, due to the current exchange rate, I get a nice little bonus each time I get paid.



        Gotta love market fluctuations.
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      • Profile picture of the author Alexa Smith
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    • 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

      Kim
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      • Profile picture of the author Chris Lockwood
        Originally Posted by Kim Standerline View Post

        yeah it is if your own currency is $ but if you use another one usually such as sterling, it makes a lot of difference

        Kim
        Eh? OK, if it makes you happy, 30 pounds is the same regardless of what country you are in. Same point I made before.

        A $20 bill does not morph into some other object when taken to another country.
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        • Profile picture of the author Lance K
          Ah crap. I came in here with the intention of counting "wanker" and "rubbish" references. And not a single damn one. :confused:

          I'm thoroughly disappointed.
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          • Profile picture of the author Sami
            Originally Posted by Lance K View Post

            Ah crap. I came in here with the intention of counting "wanker" and "rubbish" references. And not a single damn one. :confused:

            I'm thoroughly disappointed.
            LOL, Lance

            I don't normally get involved in debates that go round and round ... but I just wanted to let you if you want to see that first word of yours, you need to get a few of our Ausie cousins into the conversation ...

            I guess the rest of us have been pretty rubbish at saying rubbish.

            Sami
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        • Profile picture of the author KarlWarren
          Originally Posted by Chris Lockwood View Post

          Eh? OK, if it makes you happy, 30 pounds is the same regardless of what country you are in. Same point I made before.

          A $20 bill does not morph into some other object when taken to another country.
          You're right... but try spending it in its native form offline.
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  • Profile picture of the author Jeff Usher
    Alexa,

    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........

    Regards

    Jeff
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    • Profile picture of the author Martin Avis
      Alexa,

      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!

      Martin
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  • 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.
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    • 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.


      Frank
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      • Profile picture of the author Richard Tunnah
        Originally Posted by Frank Donovan View Post

        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.


        Frank
        Frank that is so true. As Martin said $5k a month (or about £2,800 in UK) will not give you a comfortable living in the UK due to house prices/rent, council tax, utility costs plus the general much higher cost of living including food.

        Rich
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        • Profile picture of the author Platinum Matt
          When I started, I got about 73 pence to the dollar, now it's closer to 50 odd pence... but it's going the right way.

          If you INVEST in US products and services it's good value but if you earn in dollars (as I do-almost 100% it's not so hot).
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    • Profile picture of the author Alexa Smith
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      • Profile picture of the author EndGame
        Originally Posted by alexa_s View Post

        Yes, the same is exactly true for me, of course.

        Like most of the other people posting above, you're comparing now with a few months ago. And you're right.

        Neil said expressly that he was comparing it with TWO YEARS AGO (in fact he said even more than that, he applied what he said to every time in-between as well), which is where he was wrong. It just turned into a silly argument because apparently he didn't have the decency or sense to say something like "Sorry, yes, I may have made a little mistake there" or something similar!

        If you look at his original post in the thread, you'll see that what he originally said was so far wrong that I honestly thought at first that he might have done a typo or brainslip and said "more" instead of "less" or something, and was simply trying to correct the totally mistaken impression he gave, for the benefit of other readers. I won't bother, next time!

        Does this tone or attitude to the other members of the forum sound familiar to anyone?


        On the note of UK warriors being at a disadvantage, I would say there is a slight one in some ways. I personally would love to have the funds to visit the US and do some networking with my American marketing cousins. Alas, I cannot at this time.
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  • 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!!
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  • Profile picture of the author naonline
    I think Jeff explained it perfectly.
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  • 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.

    Adam
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  • Profile picture of the author clogmoney
    Haha this thread made me laugh for several different reasons
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  • 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.
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  • 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

    Jean

    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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