5 Simple steps to help you protect profits when paying your suppliers abroad
Paying suppliers abroad can be a struggle when you've priced your goods at a specific rate in a volatile market.
Here are 5 simple steps to help you protect profits when paying your suppliers abroad.
1. Work out your costing level for your next supplier payment(s)
This is a crucial step. Working out your costing level and a target rate helps with keeping you in the black. Cost yourself realistically according to where the price is at the current time. For example, the GBP/USD rate is currently at $1.32, so you may want to cost yourself anywhere between $1.30 - $1.33. This way, you're giving yourself room for market fluctuations.
2. Keep an eye on the market events that might affect the markets you'll trade
Having a costing level is one thing, but watching the rates will help you time your currency purchases a lot better. As a food supplier, manufacturer, or any wholesaler, you might have 30, 60 or 90-day credit terms with your supplier, leaving you with time to decide when it is best to exchange your currency. It's essential to keep an eye on the rates to make sure you're keeping up to date with any sudden market movements.
Using a currency specialist like VertoFX, you have access to daily market updates so you can stay in the loop on sudden market fluctuations to help you trade within your costing levels as much as possible.
3. Go with an international payments company to save big on fees.
Banks and large brokers usually take substantial margins on fees. Use a comparison website to check the rate difference so you can see it for yourself.
Using an international payment provider like VertoFX also gives you access to trade over 39 currencies and send money to over 200 countries with a click of a button.
4. Place an EXCHANGE LATER order to secure currency at your desired rate.
Exchange later gives you the option to choose your own rate or shop for rates on our marketplace. If you want a specific rate you can place an order to attract bidders on our platform, or you can browse submitted bids and choose any that may meet your requirements. Our proprietary algo seamlessly matches marketplace participants to each other based on currency pair and desired rate.
5. Pay your supplier cheaper than the live market rate and save money.
Using these steps above you can find yourself paying for currency a lot less than what you have been. Now we’re not saying you’ll trade at the market peaks all the time but we can help you time your transactions and supplier payments to trade within your costing levels, allowing you to consistently protect your profits when sending money abroad.