Weak Dollar, Strong Sales – How to Tap Overseas Markets For More Sales
Small-scale businesses have one of the benefits of globalization’s rapid growth has been the capability to sell their products in international markets. The convergence of technological advances (telecommunications and the Internet) and low shipping prices, and the proliferation of trade-friendly policies around the world have made it fairly simple for even the smallest companies to market their products overseas. In the past year, the fluctuating price in the U.S. dollar against other currencies was a huge boost to U.S.-based small-sized businesses that are struggling to be competitive in the global market.
The currency is a yo-yo
The national currencies are valued against each other in exchanges across the globe. The value of currencies fluctuates depending on various aspects that affect the economics of each country such as interest rates for the country as well as economic outlook, inflation, and stability of the political environment. As inflation has increased and the U.S. federal deficit has been increasing as well, its value as a country’s currency has decreased significantly when as compared to currencies of the other major currencies (the Euro along with the Japanese Yen, in particular).
The dollar is not subject to fluctuations against any currency, however. Due to its role in the role of the reserve currency for all nations (the most stable currency) certain nations like, for instance, China, as well as the ones in the Caribbean and the oil-rich Middle East, have “pegged” their currencies’ worth to the dollar which implies that the worth of these currencies – usually at a significant discount to the dollar, fluctuate in line with the dollar. Some countries, such as Afghanistan, Cambodia, and a handful of countries in Central as well as South America, have adopted the U.S. dollar as their national currency.
Although the low U.S. dollar punishes Americans traveling abroad with higher costs for lodging, food, and travel, however, it can also benefit U.S. producers who are trying to sell their products abroad as buyers from abroad can buy more American goods using lesser cash. The ebb and flow of the economy were in full display in 2009 as there was a record drop in the U.S. trade deficit experienced an unprecedented decline in the value of dollars this year, and the trend continues to grow at the beginning of 2010 since the volume of American exports continues to increase slowly in relation to imports of goods from overseas.
“For U.S. businesses, the falling dollar means that their products cost a lot less in other countries,” says Robert Berman, a Providence Rhode Island-based business consultant and CPA. “In some places, less than the goods produced domestically in that country. It’s an opportunity small businesses should not ignore.” However, it is possible that the worth of the dollar, in comparison to other currencies could be reversing as well, and in recent months, the dollar has risen a little in the wake of more positive reports about the economy are emerging. But, taking advantage of the declining value of the dollar gives you the opportunity to create lasting benefits for your business. “Getting your products into the hands of overseas customers raises your company’s profile and can provide a beachhead for your company in that market,” Berman says regardless of whether the dollar is able to return to the level at which it was just three or four years back.
Profiting from the fluctuating fortunes of the dollar
A stronger dollar is an opportunity for not only small-scale companies that produce products that are sold internationally, however, but it also offers opportunities for others who do not. The lower cost of U.S. products sold abroad and creates it possible to make the U.S. a tempting venue for tourists from abroad who are able to profit from the low cost for American goods and services when they travel within the U.S. So small-scale businesses offering hospitality services or products targeted towards travelers can flourish in times of weak dollar especially in comparison to European and Asian currencies.
Small companies that manufacture products that can be promoted and sold internationally, could benefit from the weak dollar by joining with other companies that are already offering their products in countries where the weak dollar can give the advantages of their product or by attending events and trade fairs usually organized by various U.S. government agencies or the Chamber of Commerce, or even foreign governments. These events are usually attended by representatives of foreign companies looking to purchase American products.
Using the World Wide Web for World Wide Sales
Apart from forming collaborations to export your products overseas, or attending trade shows organized through foreign government agencies, the simplest method for small businesses to market their products internationally is via the internet. If your company doesn’t have its own website, you should start one. Websites are easily and cheaply created and maintained by web hosting businesses, taking a lot of the hassle away from this process. The addition of e-commerce features on your site, such as online payment methods, is also easy.
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