Pound to dollar exchange rate

[samuel5]

Anyone that imports from China, how are you managing the terrible GBP to Dollar exchange rate?

Are there any workarounds you can suggest, such as paying in a different currency if your supplier accepts it?

We have lots of orders that have recently been shipped and now our suppliers are wanting payment.
Not sure if it is worth asking for credit to pay them later as the exchange rate could go even worse!

 

[WaveJumper]

GBP / USD - 38 YEAR LOW - $1.08!!!

What are we to make of this? I am no economist, but I do business with Chinese factories who only accept USD. My buying power in May 2021 has gone from $1.43 to now $1.08 and most likely going to see the £ way below the $ at this rate!!! Is there more to the surface here? Is this more a case...

www.ukbusinessforums.co.uk

 

[DontAsk]

Get a dollar account and put the funds aside at time of order to give certainty.

 

[Red Wood]

Anyone that imports from China, how are you managing the terrible GBP to Dollar exchange rate?

Are there any workarounds you can suggest, such as paying in a different currency if your supplier accepts it?

We have lots of orders that have recently been shipped and now our suppliers are wanting payment.
Not sure if it is worth asking for credit to pay them later as the exchange rate could go even worse!

Asking for Credit at this stage will probably worry them. It's something that should be negotiated BEFORE any firm order.

However, if you don't ask you don't get and if there is already a relationship there, they may oblige, especially if you explain why.

It's taken us a long time to build relationships with a few key suppliers in mainland with 100% on account terms, but it is obviously useful, sometimes we pay on due date, sometimes before (depending on sterling rate). We will be caught out with this recent fall though, so everyone is in the same boat.

 

[Washington]

Are these large items and full containers or small higher value products coming over in groupage or postage ?

Have you checked the freight pricing, as the cost of freight is tumbling now...I am hearing sub $4k for a 40ft H/C, it was around 4 x that cost 12 months ago

I assume you have factored in a freight/shipping cost into your pricing, you may find that a reduction in the freight price will offset some of the damage done by a poor exchange rate. Perhaps it is worth looking at your costs as it may not be as bad as it initially looks

If these are small items and you are paying postage/courier costs it may be worth asking the supplier to pass on the savings to you if they have not done this.

It should be no embarrassment to you to explain to your supplier that the currency problem is hurting your business and you need them to help you by passing on some of the freight savings or it is unlikely you will be able to do more business with them until the exchange rates improve or you collective find a way of reducing the cost.... it is in their interests to keep the business going

 

[dani_moore]

Indeed exchange rates are extremely high now. You can try Wise for international transfers, they offer good exchange rates.

 

[Cimbian]

Check with your FX broker, I use Lumon, if they offer a rate guarantee. For example, I can lock a rate for X-amount of FX for a period of 3 to 6 months.

 

[Financial-Modeller]

Exchange rates can move shock!

Lots of ways to mitigate against adverse price movements - usually before you order goods.

 

[SIU]

Anyone that imports from China, how are you managing the terrible GBP to Dollar exchange rate?

Are there any workarounds you can suggest, such as paying in a different currency if your supplier accepts it?

We have lots of orders that have recently been shipped and now our suppliers are wanting payment.
Not sure if it is worth asking for credit to pay them later as the exchange rate could go even worse!

Rates are shocking at the moment. I found my broker, Estuary FX, on this forum and switched as their rates were slightly less than Wise. I know when my payments are coming up so recently, I started ordering (hedging) amounts for a future settlement date after paying out a chunk of money at a lousy rate of 1.05 (1.34 earlier this year!).

I prefer Estuary FX to Wise because I have a broker that I can call for advice, and also when I want to get views on where the rates are going.

 

[paulears]

I buy a few items in small batches of 4 or 5. Keeping track of the same item over say 2 years is really scary. The dollar price has been increasing due to the "chip shortage" and now the exchange rate has made it worse again. Over two years, one item that sold for £139, is now selling for £229 with my margin adjusting the price to maintain roughly the same amount.

 

[WaveJumper]

Dollar is at a 20 year high in part now due to the Federal Reserve acting faster than most other central banks in raising rates and secondly its seen as a safe haven and appears to be the global favourite especially for traders who have moved from stocks to FX trading during current market volatility

 

[Paul Kelly ICHYB]

....and rates are also shocking for your competitors!

Get a dollar account and put the funds aside at time of order to give certainty.

This way, you can calculate your landed cost with less errors. If shipped by sea, you have a month to take action on pricing, marketing etc. Use this as a marketing opportunity - old stock at a better rate running out - new stock will be more expensive.....