In the blink of an eye, we’re launching into the 2021 holiday sales season. As retail stores begin to reopen in Australian states emerging from lockdown, online and in store sales are set to spike once again during Cyber Monday, Black Friday and Christmas.
Amidst preparation for the retail holiday sales rush, it’s important that you also factor in currency considerations when working with a global customer base, global logistics and overseas manufacturing suppliers. You may find additional currency conversion rates and foreign exchange (FX) fees could impact your sale price and profit due to currency volatility.
So, what’s the best way to stay on top of your FX costs ahead of the holiday sales season? Here at OFX, we know it can be done successfully, but planning is crucial. Here are my top tips to get prepared for the upcoming seasonal sales spike.
Add FX to your sales toolkit
With 49% of global consumers continuing to shop online, your revenue streams may stem from international customers. To accommodate international eCommerce growth, leveraging competitive FX rates can help to ease the potential impact of currency swings on your profit margins from global sales.
Looking for more certainty on budgeted costs, particularly during periods of volatility or ahead of large sales volumes? This is where FX management tools can come in. A Forward Contract, for example, allows you to fix an exchange rate for up to 12 months, helping you plan for upcoming payments and may help avoid shifting exchange rates impacting planned costs.
If you have a target exchange rate in mind but don’t have the time to keep an eye on what currency markets are doing, then you can use a Target Rate Transfer (also known as a Limit Order). If the rate hits the level you want within the six month time frame, your transfer will be locked in and OFX will contact you, leaving you free to focus on your business.
While the holiday sales season is set to amplify consumer spending habits, being aware of and leveraging these potential FX tools can help reduce the currency-related hits to your profit margins.
Don’t get caught out by hidden FX fees
Australian online retailers selling overseas using payment gateways, such as PayPal and Afterpay, or online marketplaces, like Amazon may not be aware of automatic currency conversions charged by these platforms.
Unless you hold a local US bank account to be paid in US dollars (USD), your revenue will be automatically converted to Australian dollars, leaving your business vulnerable to any currency volatility on that date. For many businesses, this may be a pain point when needing to convert back into USD to pay manufacturers, resulting in double the conversion fees.
Consumers across the globe will be hunting for good deals during the upcoming Cyber Monday, Black Friday and Christmas period. Implementing plug and play FX solutions like an OFX Global Currency Account, which acts like a local account in the currencies you do business in*, can support your business with managing multiple currencies for the busy sales season ahead.
Combining FX specialist support with a multi-currency account and a robust FX risk management plan, can help manage the impact currency volatility has on your business during major global sales periods and beyond.