Any aspiring ecommerce business will surely have ambitions of gaining customers the world over. With technology becoming more sophisticated by the day, selling and shipping overseas is (Brexit pending) gradually getting easier, but how can small businesses selling products and services online make the most from building sales outside of the UK?
Statistics from January 2017 revealed that exports out of the UK were worth £28.3bn for that month. Although in that month, the UK was a net importer, there is clearly a market for selling British goods elsewhere in the world. Learning how to do so involves knowing how to work with different currencies, which is where a form of trading comes in.
Getting to grips with trading in Euros, Dollars, Yen and so on can be learned through playing the foreign exchange (forex) markets. For anyone who is new to anything that isn’t Sterling, it gives you an idea of how much each currency is worth and how they can all change in value against one another.
When working out how much you stand to make from sales in Euros, trading forex is a good way of learning about exchange rates. To make forex work, you have to end up with more money than you started with each trade, so:
- You choose to trade one currency against another (a currency pair, such as the GBP/USD)
- Decide whether one half of the pair will rise or fall in value against the other
- Go long for expecting a currency to increase in value
- Go short for expecting it to decrease in value
- Close the trade when you’re happy with any profits made or want to minimise losses incurred
One thing businesses must do is keep up date with how much the pound is worth against other currencies. When trading forex, this is especially important, as you will know how each trade is going and gauge whether it will have been successful. In knowing this, it makes projecting income far easier, as well as making note of how much money you stand to make from selling in each currency.
To make sure you get the most from it, try not to stake too much for your first trade. Look at the trends for how each currency has increased or decreased in value – websites such as Bloomberg have data to hand over periods of days, weeks, months and even years. Finally, treat each trade as a learning exercise, trying to avoid mistakes as you go along.