Pound VS Dollar – £ VS $

I found this nice graph to start with to give you an idea of my problems,

As you can see from that graph the amount of dollars per pound has dropped dramatically. So what? Many people may just be thinking so what? You do not travel to America or buy imports etc so why does it bother you? Well firstly if you have not already guessed I am from England so I deal in pounds however the internet today is centred on dollars. So this means that it makes sense for me to trade in dollars else my market will decrease.

In theory I am going over to America buying and selling and then returning every day. Why is a website any different that a toy or a piece of fruit? The point is that many of my purchases simply now costs me more. About 8-9 months ago my server was costing me £85/month however in the new exchange rates it is costing me £120, this is £35 extra!

This does not really affect everyone in America however it is crippling for us over here. I have seen many businesses simply close because they cannot afford the exchange rate and it makes sense, somewhere along the line I have to make that £35 extra from nothing. That is where problems begin, how do you make £35 extra from the same things? The basic answer is you can’t without money, okay I know there are free things out there, but to make good money you need to invest a moderate sum.

How is the exchange rate a good thing?

The exchange rate is not all bad; it makes sense that if things are costing me more than the things I sell are making more. This is what has kept me alive, the majority of my products are selling well now and all my products are in dollars. Take Pardiowars for example one sale used to get me £35 but it now gets me £48 with no effect on the buyer. This means as long as I continue making profits I can benefit.

How to take advantage of the exchange rate?

This next section is aimed mainly at people from England however works for anyone with a different currency. Stick to one currency, this can be pounds, it can be dollars, it can be euros but stick to one. Buy everything in that currency and sell everything in that currency. If you start switching between the two you will start seeing a dramatic drop in profits.

How I do it is to keep $200 odd in paypal. This is normally enough to pay for things when I need it, try to always have enough dollars in papyal to stop it needing to extract money from your bank. If you do get over $200 and want to withdraw why not look into other options? How far away is your next hosting bill? The majority of hosting providers will let you pay in advance, take advantage of this instead of paying the exchange rate twice.

If you are selling in dollars make sure you are buying in dollars, the majority of online companies will accept dollars so look out for this.

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