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Ways to Increase Revenue 3% on each Sale Internationally

International marketplaces are becoming more and more important for small businesses and Amazon sellers. Though there are many other facto...

Sale Internationally

International marketplaces are becoming more and more important for small businesses and Amazon sellers. Though there are many other factors, the main one is low risk. There are numerous potential for additional revenue when you offer your items in foreign markets. Selling to the other EU members is nearly mandatory for vendors, particularly those from smaller nations like those in Central Europe.


What's important is that there is very little danger and expense involved. It costs very little up front to offer your goods to a vast delivery radius (like Amazon sellers do); for some businesses, the only costs associated with this are marketing costs if they want to expand into a new area. The benefit could be a few more sales, but it could also mean being the first to market with a brand-new product and earning a competitive edge.


It brings about variety. Having a sizable amount of revenue from multiple markets is one way to reduce systemic risk in the event of political unrest, job losses, and/or a sharp decline in the purchasing power of the domestic economy. This is because it is unlikely that all of the markets would experience the same level of economic impact. This also holds true for modifications in laws, customs, and culture.


All it takes to expand internationally is a few button clicks on eBay or It's also possible that the provider the business now uses for delivery provides affordable international shipping.


For instance, DHL, FedEx, and UPS are available in practically every nation.


However, they pay in their local currency when selling to overseas clients. This puts the onus of currency exchange on the vendor. Amazon makes the most of its integrated currency exchange feature when it makes a sale. The rate is probably about the awful 4% that a commercial bank offers its clients, give or take.


It's not clear just how much markup is involved, which is never a good thing. Additionally, a lot of sellers would do it without second thought. It substantially reduces their earnings. Retailers who sell on Amazon (or eBay) typically face intense competition in their industry. Because there are so many vendors on these platforms, gross profit margins are probably going to be quite low unless the offered good is really distinctive (maybe something handmade).


Every percentage matters when using a low-cost strategy of high volume, low prices. You are probably competing against domestic businesses who do not lose a portion of their sale to exchange rate markups, thus spending an unnecessary 4% on currency conversion could mean the difference between survival and failure. For the avoidance of doubt, this markup is applied on the total sale price of products sold on Amazon rather than the net profits. This represents a $4,000 annual waste when sales revenue is $100,000, to put things into perspective.


How to get around the exorbitant exchange rates

However, there are still some choices available to shops and Amazon sellers. It is possible to reduce currency margins from the exorbitant 4% to approximately 0.5% to 1%. This is accomplished by opening foreign collection accounts, which entail that when a foreign customer pays your business, the money stays in their local currency in one of your foreign accounts.


Why is this advantageous?

That way, you have more control over the process of exchanging your money instead of relying on Amazon. Alternatively, you can use other money transfer providers and these collection accounts themselves. Numerous might be employed to cover many areas. For instance, World First covers Singapore, Japan and China, USA and Canada, and money corp may be used to cover the EU. OFX covers Hong Kong, New Zealand, and Australia. All of them typically provide suppliers with outgoing payments in more than 100 currencies (money corp is 40).


For most businesses, a higher transaction volume results in a better exchange rate. But, it will be superior to the Amazon currency exchange regardless of volume. Businesses with large sales may benefit from this. When opening an overseas collecting account, an additional $3,000 in profit should be anticipated if annual revenues exceed $100,000.


However, it is important to keep in mind that this can result in longer transaction times. Generally speaking, having an overseas account will probably cause your cash flow to slow down even if the transaction times are fair because you won't have time to send money on a regular basis.


To solve these problems and cover for the times when sales revenue is not yet in the domestic business account, a little cash buffer would be a wonderful idea.


PayPal will be used by a lot of merchants, especially on eBay, to handle payment collection. This is okay, but, like with banks and Amazon exchange, you should avoid PayPal's transfer fees and exchange rate at all costs. It makes sense to move funds from PayPal to a TransferWise account instead.


Since PayPal is still a very safe corporation to use in business, connecting a TransferWise borderless account to PayPal is great. Nevertheless, connecting an account for transfers entails having the best of both worlds: a money transfer provider that will give the best available rates that are on par with the interbank rate, and PayPal's security and broad applicability to practically all other third parties.

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