Editor’s Note: This is a guest post by Jason Magee from our partner, World First.
For those involved in business, it’s always good to hear about new ways of saving money. And when it comes to eCommerce, here’s a way in which your business could save money when making profits on overseas sales on online marketplaces such as Amazon, eBay and play.com with repatriating those funds.
Keep reading to learn more.
You may be thinking at this point that if there is a way to save money on your international currency transfers, then it certainly won’t be an easy one, but that’s not the case. It really isn’t difficult to save money; it just requires a minor alteration in the way you send your profits back home. It’s all about getting the best exchange rate.
At the moment, when you set up with the likes of Amazon, eBay and play.com to sell internationally, you probably won’t be getting the best exchange rate when transferring your profits back home. And though you’re unlikely to have any problems transferring your profits from major currencies back into a US bank account, you may find that you’re unable to transfer funds into bank accounts in some other countries.
It might be worth trying a currency exchange specialist, with whom you can be sure that your funds will be sent wherever you want them. Plus you’re likely to get a much better exchange rate than the major etailer marketplaces, or indeed, your bank. A better exchange rate means more of your money will make it home, and as you will know only too well, every dollar counts when it comes to a business’s bottom line. Shop around – choose a company who don’t charge to set up, on your behalf, receiving bank accounts in the US, UK, Europe and Canada, which let you receive payments from your marketplace sales.
How can they offer better rates?
Simply by taking a smaller margin. When you use one of these bigger marketplaces, they tend to take a bigger spread, and therefore a bigger cut of your cash when you’re sending it home. All of which means you end up with less. Currency exchange specialists who are able to help specifically with ecommerce clients in general take a smaller spread, and pass the savings onto their clients.
This example shows how easy it is to save money. A US-based company sells £20,000 worth of goods on a major marketplace in the UK and has the marketplace send them USD, but they later realize that they’re paying an extra 3.5 – 3.75% on the conversion. Alternatively, another etailer gets a currency exchange specialist to open up of their behalf – for free – a UK-based GBP account. The marketplace sends GBP straight to the account with no conversion. The funds are then converted back to their account back home in the US at a much better rate than they’d have got from the major marketplace.
Most people still use their banks for international money transfers, and when it comes to eCommerce, they just accept the exchange rate given to them by the major marketplaces without realizing how much they could be saving by making just a small adjustment to the way they make their international payments.
Jason Magee is the Director of Business Development at World First.
Learn more about how SellerEngine and World First can help you save money on your currency conversions.
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