In a blink of an eye, we are about to enter the 2021 holiday sales season. As retail stores in Australia’s states begin to reopen from the lockdown, online and in-store sales will soar again during Cyber Monday, Black Friday and Christmas.
In preparing for the retail holiday sales boom, it is important that you also need to consider currency factors when working with global customer bases, global logistics and overseas manufacturing suppliers. You may find that due to currency fluctuations, additional currency exchange rates and foreign exchange (FX) fees may affect your sales price and profit.
So, what is the best way to control foreign exchange costs before the holiday sales season? At OFX, we know that it can be completed successfully, but the plan is crucial. Here are my important tips to prepare for the upcoming seasonal sales peak.
Add FX to your sales kit
with 49% of global consumers Continue to shop online, your source of income may come from international customers. In order to adapt to the growth of international e-commerce, the use of competitive foreign exchange rates can help alleviate the potential impact of currency fluctuations on your global sales margins.
Want to be more certain about budget costs, especially during periods of volatility or before large sales? This is where foreign exchange management tools can come in handy. For example, a forward contract allows you to fix the exchange rate for up to 12 months, helps you plan upcoming payments, and may help prevent exchange rate changes from affecting plan costs.
If you have a target exchange rate, but don’t have time to pay attention to the currency market, then you can use the target exchange rate transfer (also known as limit order). If the exchange rate reaches the level you want within a six-month time frame, your transfer will be locked and OFX will contact you, allowing you to freely focus on your business.
Although the holiday sales season will expand consumer spending habits, understanding and using these potential foreign exchange tools can help reduce currency-related profit margin losses.
Don’t be attracted by hidden foreign exchange fees
Australian online retailers that use payment gateways (such as PayPal and Afterpay) or online marketplaces (such as Amazon) to sell overseas may not be aware of the automatic currency exchange fees charged by these platforms.
Unless you hold a local U.S. bank account that pays in U.S. dollars (USD), your income will automatically be converted to Australian dollars, making your business vulnerable to any currency fluctuations on that day. For many companies, this may be a pain point. When the need to switch back to U.S. dollars to pay the manufacturer, the conversion cost doubles.
During the upcoming Cyber Monday, Black Friday and Christmas, consumers around the world will look for preferential prices. Implement plug-and-play FX solutions, such as OFX global currency accounts, just like the local accounts of the currency you conduct business*, which can support your business to manage multiple currencies in the upcoming busy sales season.
Combining foreign exchange expert support with multi-currency accounts and a powerful foreign exchange risk management plan can help manage the impact of currency fluctuations on your business during and after major global sales periods.
read more: Basic elements beyond Australia’s borders