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I understand your concern but was thinking more along the lines of whether the average consumer takes exchange rates to their own currency into account when making a purchase.
In an international marketplace the universal currency is the USD with the EUR fast catching up, but the majority of people online are not American so I believe a mental process takes place of converting the USD price into the consumers' local currency.
I've never been able to test this but as the USD is so low at the moment I feel that this is as good a chance to test for increased sales due to currency fluctations.
If non US sales have increased by a decent percentage and your prices are in USD then I think it is fair to assume that the lower end price for the consumer may have a direct effect on the increased sales.
The theory is sound and this "should" work but I look to all the sellers of various widgets to help me out :)
The main reason for this is that if we can show that a ticket price stays the same but a localised price decrease due to exchange rate changes increases sales then a campaign to those countries that don't use the USD should increase sales further.
Again the theory is good but what about in practice?
I am in a predicament - what do you do if you have a 2CO account with say $1000 in it? If you release it now the conversion rate destroys your profit margin, but if you wait you get no money.
Anyone else in the same boat?
Take the cash if you need it, else wait......and pray it doesnt go further against you.
If the pound went against the dollar it mean that I could drop my prices.. Oh wheres that witch doctor..
I was going to reduce my retail prices to reflect the falling dollar, but thought better of it because i would have to raise them again when the dollar rises, and customers don't like price rises!.
This is a continuing long-term problem that needs to be guarded against. I think that I will produce a couple of sites targeted to my native currency, Sterling, so that if the Dollar slides again it won't be as much of a problem.
Has anybody thought about a long term strategy - how do you intend to spread your loss due to a fluctuating currency market?
4) All other
Really has only effected English speaking countries as our web site is only in English.
BTW we raised prices and it has had no effect..
The ones making the bucks should be American Exporters as it is now cheaper for the rest of the world to buy. I also would say the informed customer has a handy currency conversion website at their disposal to figure out the price in their currency before they buy and take it into account.
If the theory that behind the scenes the US Gov. is pushing the US dollar down to help rebalance the American Trade Deficit and spark the economy you might be in for a long wait until the US dollar rebounds.
They've been predicting the decline of the overvalued dollar and recovery of the undervalued euro for some time; it was exceeding historical averages in the Clinton administration. The US trade deficit remains totally unsustainable; to sustain the value of the dollar with such an outflow of capital requires a high national savings rate or a massive inflow of foreign investment. Well, the national savings rate is pitiful, and consumer and corporate debt (not to mention state and federal debts) get deeper by te minute.
Foreign investors, meanwhile, have been able to get better returns on their money at home instead of in the US (1% interest rates don't do much for anyone in any country, but especially when it's in a declining currency). Property, for instance, is super-hot in Britain, Spain, Australia, and a few other places. The Y2K bubble is no longer around to suck in... er, I mean attract investment like it did five years ago.
On top of that we have the environmental complication that China and Japan are reluctant to allow the renminbi (yuan) and yen to appreciate, the former because it would shatter the country's banking system and the latter because it would hurt export manufacturers who are one of the few bright spots after a decade of post-bubble recession. Squeezing the balloon on that end accentuates the rise in the euro and sterling against the dollar even more.
The Bush Treasury probably wants a lower dollar, but they don't need to push. The last thing they need is a crash; two fifths of the public debt (according to the Economist) is held by foreign investors, interest rates would rise fearfully, and the stock and bond markets would probably crash as well, all with dire effects. Like the overinflated stock market, the dollar needs a "correction," and hopefully this will rebalance the world economy a little bit. Fewer Argentinas, right?