On 21 Mar 2008, at 10:01, Andy Powell wrote:
On Thursday 20 March 2008 16:05, Stroller wrote:
<snip>
But we must remember that an importer has to tie his own money up in
stock (money that could otherwise be earning interest for him) and
gamble with the currency exchange rates. If he buys when the dollar
is at 1:X and the exchange rate changes disfavourably to 1:Y, then
he has to swallow the difference on all his existing stock.
<snip>
Actually the best way to handle that is to buy currency at a fixed,
guaranteed
price. ukforex (no affiliaton) do this sort of thing. I don;t
understand why
more people don't do it. If you're importing stuff on a regular
basis it just
makes sense..
Perhaps I'm failing to understand what ukforex does, but let's say I
buy 100 units at $100 each, and buy 1.5 dollars for a Euro. I have
spent $10,000 or €6,666 on the devices, or €66 each.
A month or two later the dollar falls to $2:€1 - everyone starts
complaining that a $100 device "should only cost €50". That doesn't
really help me, if I have 50 devices which I paid €66 for remaining
in stock.
(I hope I got the maths right - it's a little early in the morning
here).
Generally speaking currency fluctuations aren't so great over a short
period, but nevertheless margins can be quite small, too (otherwise
consumers start whinging about how they're being ripped-off!!).
Consequently apparently-small fluctuations can make a big difference
in the trader's pocket.
In another post the importer is quoted as saying "we're no bastards
making a $100 profit with each box." Now I no longer sell or import
hardware, and never did so full time, but I wouldn't bother selling
the Freerunner unless I DID make the best part of $100 on each one.
The Freerunner importer is CLEARLY no bastards!!
I used to sell wireless cards as guaranteed Linux-compatible and made
a 33% - 50% markup on each one, but even with that markup it wasn't
worthwhile. Actually, 33% - 50% is a naive assessment of markup,
because Google Adwords took a massive chunk out of that, but
nevertheless the size of the Linux market is too small to support
much business; one has to pay one's employees, the 1% or 2% you lose
because everyone wants to pay by credit-card is like being stabbed to
death with sewing needles and finally the taxman wants a cut of one's
profit!! Margins on selling hardware are just so small that I don't
know why anyone would wish to expose themselves to this list's whining!
Stroller.
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