Why You Would Benefit from a Collection Account Abroad
If you are selling overseas via the internet, you are likely to deal with foreign currency exchange with your buyers, and if you are paying the fees charged by the likes of Amazon or PayPal, you are going to be diminishing your profits, so why make them even lower than they need to be?Is Paypal and others like it worth it at all?
For example, let’s say you sell jewellery on Amazon.co.uk and you sell more than 35 items a month which qualifies you for the Pro Account. If you charge £50 per item, and the shipping cost was £4, then you would pay a total of £13.50 in fees to Amazon. Even though your customer would pay a total of £54, you would only receive £40.50 from the transaction. On top of this, you would also have to pay the £25 per month fee plus VAT.
Even if you sell less than 35 items a month and qualify for the Basic account only, you would still pay 75p per item sold, plus the referral fees to Amazon. So, taking the above example and selling £50 worth of jewellery, the referral fee for this item class is 25%, so including the £4 shipping cost, you would lose £13.50 plus the £0.75, so you would actually receive £39.75, and there could even be additional fees on top.
Currency charges reduce profits
That is tough enough to deal with, but if your customer chooses to pay in a different currency to the one you are charging in, then you will be charged as much as 4% by Amazon on top of the other fees just to get that money back into your account in your own currency.
If you were being paid the full £54, then a 4% additional charge to convert the currency back to your own would cost you an additional £2.16. Even if you were charged that amount on the £40.50 you were getting back after the other costs, you would pay £1.62 for the pleasure of getting this money back into your own account.
A better way
However, you can reduce these charges significantly by using a different type of account that allows you to deal with the currency conversion for between 0.5% and 2%. World First offers a dedicated collection account, which allows you to have the money you have earned from your online transactions sent to a specialist account abroad and transferred to your own bank account for the much lower 0.5% to 2% fee.
On a £54 transaction, this would cost you as little as 27p to move that money to your own account, compared with £2.16 if you were paying 4%. This facility can also be used for any online transactions, whether through a third-party site such as Amazon, or your own website which sells directly to your buyers, and either way you can save money on your online transactions.
By selling through your own site, you can increase your profit margins on each sale, but you would have to get the traffic to your site in sufficient quantities to make the sales you need. That is the plus side of using a third-party site such as Amazon, but the costs are significant, so you need to cut your costs as much as you can.
Who is World First?
World First is one of the highest rated money transfer companies, with more than 75,000 active clients and, according to its reviews, easy sign-ups and courteous staff. The company’s Online Seller Account Package positions it as one of the few currency transfer providers that specifically deals with e-commerce transactions for everyone from large corporations to smaller sellers. It is also available to individuals, so everyone can benefit from cheaper foreign exchange transactions, no matter who they are.
World First’s merchant programme allows online sellers to transfer amounts over £1,000 back to an account in their own currency at no cost. It also has an app which, unusually for most currency transfer companies, allows you to make transactions via your mobile phone.
Since the lower limit for transfers is £1,000, this may be difficult for some smaller or individual sellers to reach in the short term before the money can be transferred back to their own account, but this is one of the few downsides to this provider for ecommerce users.
Dedicated dealers
World First has dealers who are dedicated to ecommerce sellers, and are specialists in this area. So they understand the difficulties faced by online sellers, and are trained to help you overcome them.
For some, the company’s credibility will be a key factor in whether they are prepared to use them or not, but with a near 98% satisfaction rating on from around 7,000 reviews on Feefo among other sites, it is clear that World First is doing something right.
Feefo reviews are authenticated, so you can be sure that the people offering their opinion on the business have had first-hand experience of its practices.
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