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Weaker U.S currency & online shopping

Posted by Michael Bloch in ecommerce (Saturday October 9, 2010 )

As an Australian who derives a appreciable chunk of his income in U.S. dollars, the last few months have been pretty grim. However, many Australians are taking advantage of the situation of the weaker greenback and increasingly buying items from U.S. based online merchants due to a a more favorable currency exchange – for them anyway.

Thinking back to 2000/2001, I seem to remember a period where 56 U.S. cents equaled 1 U.S. dollar. Those were pretty good times for affiliate marketers like me; based in Australia, but focused on the USA market.

Fast forward to today and at the time of writing it’s 98.5 U.S. cents to the Australian dollar. The Aussie dollar is expected to hit parity with the greenback in the next few weeks.

What means is that I have to make nearly twice as much as what I did back in 2001 to generate the same revenue, and that’s not including inflation. It’s the highest the dollar has been against the greenback in 28 years – since the dollar was floated.

Them’s the breaks in this game.

But as the old saying goes, it’s an ill wind that blows nobody any good.

According to an article on Adelaide Today, web and currency savvy Australian online shoppers are flocking to U.S. online retailers as the Aussie buck is now buying so much more. It’s not just Australians hitting U.S online stores as the greenback is weakening against other currencies as well.

According to an eBay spokesperson nearly half of the products bought from the site at the moment are from other countries.

So, if you’re based in the USA and doing things a little tough – think outside the borders. Bear in mind that not all Australian shoppers, or those from other countries for that matter, will be comfortable buying from an overseas merchant, simply because it’s the great unknown. If you do cater to foreign orders, stick up a few pages on your site targeting these people; reassuring them of shipping and other issues. It’s also worthwhile to add a currency converter to your shopping cart software.

On a related point – check out the guide to cross-border ecommerce. It’s more focused on selling to Canadians, but many of the points would be relevant.

May my bad luck be good luck for you.


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