Just when we thought we had it covered, a new wave of COVID-19 restrictions hit the country with hard lockdown measures and border closures. The re-introduction of government support schemes has provided some SMEs with a foothold to protect their businesses, however, in most cases, it’s only a temporary solution.
Laying the groundwork by entering or growing your business presence through eCommerce could be a way to reach new customers in Australia and overseas and help protect your revenue stream if there’s a downturn in your domestic market.
Lockdowns have increased the time consumers’ spend browsing for products and services online. According to eCommerce accelerator Pattern, 86 per cent of Australians have made an online purchase in the past month. An independent survey of 145 Australian e-tailers shows that 66 per cent of online retailers will allot more resources and money into growing or maintaining their online function this year.
At OFX, we’ve seen how SMEs have used global platforms and foreign exchange (FX) strategies to make the most out of the pandemic, helping to benefit their business, potentially increasing profits.
Looking for the nudge to enter into eCommerce? Here are some valuable insights and tips to boost your confidence.
Understand the true cost of FX payments
It’s important to have some degree of certainty on your budgeted costs when selling in other markets. Be aware of international transfer fees or currency volatility that could dent your profits.
Many Australian businesses looking to sell globally may find payment gateways such as PayPal and Afterpay, or online marketplaces like Amazon, require a US dollar bank account held in the US. Without a US-based account, any USD revenue is automatically converted back into AUD using the platform’s own exchange rates. In addition, Paypal can charge up to five per cent of the transfer amount while banks often charge a fixed price for international transfers, so when converting AUD back to USD, you could be impacted by double conversion fees.
Level the financial playing field with specialist expertise
Now, with a better understanding of hidden costs and potential financial risks that could impact your eCommerce operations, it’s worth seeking specialist FX help. Finding the right provider will result in streamlined financial processes, and avoiding the payment of gateway fees on business profits.
While support schemes are a short-term solution, eCommerce could help offer a sustainable option for new revenue streams, if set up right. Taking the steps to educate yourself on the FX solutions available and working with a currency specialist can give you confidence to grow your business globally.