Amazon is the premier place for everyone selling anything online, especially if you aim to sell abroad. Amazon net sales go over $178 billion a year, according to Statista, and it continues growing and offering new services. However, not all features offered by the legendary retailer are as good as they appear at first. Amazon’s auto exchange, in particular, is a source of much debate. The hard facts show that this rate is sub-par at best. For a small business that strives on retail sales abroad, this can be a major problem. Finding a better method of accepting foreign payments is vitally important for such businesses to survive.
The Reality of Amazon’s Currency Converter & Its Alternatives
Amazon Currency Converter seems like a great service at first glance. It enables shoppers to buy from sellers in other countries as long as there are shipping options available for them. And instead of exchanging their money directly to make the purchase in the merchant’s currency, the converter feature will provide a price in the buyer’s currency.
There is no denying the fact that this service is very helpful for frequent shoppers who are looking for maximum convenience. However, sellers are the ones seriously shafted in this deal because Amazon’s Currency Converter feature will rob you of up to 4% of the money that should be coming from your foreign customers.
And that’s not even counting currency exchange rates used by Amazon. Those are hardly ever the best, meaning you are losing even more money. Therefore, a seller that wants to profit from global sales requires reliable Amazon alternatives. Specialist money transfer providers, like OFX and World First, are recognized Amazon partners and offer services you can use instead of the Currency Converter to achieve the same goals. Meaning, you’ll get global payments from customers but will be able to avoid the Converter’s inflated fees. You can also try making a subsidiary with a bank account abroad. However, this method is much more complex and expensive.
Using Money Transfer Companies with Merchant Accounts When Selling through Amazon
Money transfer companies that offer merchant account allow retail sellers to accept payments from abroad with minimal losses. They are rather simple and straightforward in their operation. In essence, you open an account that your customers make payments to. This will be a dedicated international account, meaning buyers from a variety of countries will be able to make payments in their native currencies.
And this is where the benefits of specialized money transfer companies start to come to the fore. The main advantage of using these services is that they allow minimizing the money the merchant loses in the transaction because they use the most favorable currency exchange rates.
Moreover, the service fees charged by money transfer companies are minimal because their operating costs are low. As a result, where the Amazon Currency Converter service cuts out about 4% of your profit, a merchant account with a specialized money transfer service might limit this to 1-2%.
However, increased profits aren’t the only important benefit these services offer retailers. Another great advantage you get is increased market reach. In spite of the fact that Amazon stores are available nearly everywhere in the world, international payments through them are only available in several countries. When using a money transfer company, you will be able to easily accept payments from dozens of countries. The exact list will depend on the company you choose.
You also shouldn’t forget that money transfer companies are subject to rigorous regulation. Therefore, you can be confident that services with proper certifications are reliable.
To sum it up, regardless of whether Amazon is your main avenue for selling abroad, you definitely should consider using money transfer services. Their flexibility, low fees, and reliability make them valuable assets for small businesses trying to increase their market outreach.