Selling on International Marketplaces?
If you run a business that sells products via international marketplaces, you could be losing out on a large portion of your sales revenue without even realising it.
Lots of companies that sell internationally on marketplaces such as Amazon, E-Bay or Rakuten, simply leave it up to the marketplace to transfer their sales revenue to them. Unless the seller has a bank account setup in the country they are selling in, they are unwittingly subject to an exchange rate margin of 3-5% when their overseas revenue is transferred to them.
This margin means you lose up to £5,000 from a £100,000 sales total. You can avoid this “fee” by either having a bank account setup in the country you are selling to, or you can setup a “virtual” collection account through a currency broker. This allows you to collect your revenue in the currency of the country you are selling to and move the money back into your home currency at a much better exchange rate.
The advantages of this setup can be found below, but these also completely depend on your specific needs and the countries that you operate in.
The advantages are;
- No fees for setting up a collection bank account
- Better exchange rates when you repatriate your sales revenue
- No fees for transferring your sales revenue
- Quick transfers to your home currency
- Payments direct to suppliers possible
The disadvantages are;
- Some brokers do charge monthly fees for the accounts
- Some brokers also charge for smaller transfers
*Even with the two disadvantages listed above, it would still save a considerable amount of money compared to if you leave it up to the marketplace to do this.
Who to use?
The currency brokers that Currency Pal recommend can be found below, we have selected these because we believe they offer the best solutions based on price, customer service and exchange rates.
OFX are one of the largest FX brokers in the world. They offer the best exchange rates (as standard) and have no fees when you make transfers through them. They have come late to the online seller party, but they are quickly catching up and overtaking competitors. They offer collection accounts in the following currencies USD, GBP, EUR, CAD, AUD, HKD. Visit their website and have a look at their online sellers section at the following link – OFX
Currencies Direct were the first currency broker to offer same currency payments, setting the trend for the others to follow. There are fees for their online seller service, which involves a 0.1% fee for all amounts transferred into a receiving account and a currency margin ranging between 1-2% for international transfers. They offer collection accounts in GBP, USD and EUR. To find out more, visit their website at the following link – Currencies Direct
How it Works?
First you need to register with a Currency Broker, this will require supporting documents as detailed below. These differ all over the world, but the basic documents are all the same (proof of who you are and your business).
If you are a UK company with non-UK shareholders or directors, copies of government issued photo ID (e.g. passports), and proof of address (utility bill or personal bank statement) no older than three months are required.
If you are a business located outside of the UK and looking to operate in the UK, you will need to supply the following documents:
- Copies of government issued photo ID (e.g. passports) for directors and shareholders
- Copies of proof of address (utility bill or personal bank statement) no older than 3 months for directors and shareholders
- Copy of the annual tax return or other official document which confirms the names of the individual shareholders/owners of the business
- Copy of the certificate of incorporation or business bank statement
Once you are registered with a currency broker, they will issue you with all the necessary banking details for your collection bank account, which you will then in turn provide to the online marketplace you are selling through.
After everything has been confirmed then you simply have to wait until your revenue is deposited in your collection account. You will be notified when this happens by the broker via e-mail, phone or even text message. You can then decide what you want to do with your funds – pay a supplier, change into your home currency or just sit in the account waiting to be used.
If you would like to contact Currency Pal, we will happily pair you with the right broker and a direct contact for you to liaise with.
Call us now +44 7769 220186 or email firstname.lastname@example.org