The cost of goods for importers and the cost of your goods for exporters is dictated by the price of pound sterling or GBP compared to the currency you are either buying or selling. The whole journey into the foreign market is unrewarding unless you are very careful and have a currency strategy that protects your margins to make you profit.

Amid all the useful advice on the wider commercial implications of international trade and insights into the global trade environment, why isn’t more attention paid to foreign exchange and risk management?

Pay attention to foreign exchange and risk management

Competitive margin rates are vital to successful businesses. The more competitive the exchange margin, i.e. the difference between the interbank rate and the exchange rate you actually get, the better your exchange rate will be, the more competitive your business will be, and the more your profits will grow.

Businesses entering this international marketplace often turn to their banks for these services as long-standing relationships are already in place and it seems the logical place to start, but invariably this is not always the best option.

Should you use your bank for foreign exchange services?

Independent companies, like SW Foreign Exchange, offering full treasury management services exists because they consistently offer more competitive pricing and can offer the additional help and guidance international trade businesses might need.

They can offer you the benefit of their knowledge and every possible advantage in the ever-fluctuating currency market to make sure you are set up to complete secure transactions as efficiently and quickly as possible.

They will also potentially take more care over your overall requirements. Most will offer a one-to-one service to make sure you are aware of all the different contracts available to avoid currency risk.

International trade businesses need foreign exchange advice

Currency exchange can be a minefield and it is where several companies become unstuck. However, if you were bold enough to enter the overseas market to make more money, then don’t be afraid to seek operational advice if you are uncertain about how foreign exchange services can benefit you.

We see this as the vital element. New and experienced importers and exporters alike should have a clear understanding of the basic procedures and good practices. Having a currency strategy is so important and margins are vital, so be bold and compare these independent companies to what your bank is charging and see if they can make a difference. It will cost you nothing, but could make all the difference.

If you need our help for your first foray into international trade or if you are an experienced import and export business that wants to fine tune your currency management, please do not hesitate to me.