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£=$1.70 but I bet we don't see the benefit

Discussion in 'The Lounge' started by Learning, Jun 16, 2014.

  1. Learning

    Learning Ethelred the Ill-Named

    Rip off British companies, and equally greedy Japanese companies, will no doubt treat the dollar and pound as having the same value.
     
  2. Roger Hicks

    Roger Hicks Well-Known Member

    Hardly. Yes, advertised US prices are often similar to advertised UK prices, dollar-for-pound, but UK prices include VAT and US prices don't include sale tax. Also, the Japanese yen is not the same currency as the pound and the dollar. Someone whose expenses are in a third or fourth currency have to hedge their bets: they can't just push prices up and down every ten minutes. Also, the UK has rather better consumer protection than the USA and much better worker protection. In other words, comparatively minor fluctuations in currency values don't really justify "rip-off" and "greedy", at least outside the pages of the Daily Wail.

    Cheers,

    R.
     
  3. Barney

    Barney Well-Known Member

    Absolutely!!!
     
  4. Sejanus.Aelianus

    Sejanus.Aelianus In the Stop Bath

    I'm not sure that argument, valid as it certainly was thirty years ago, still flies. With the level of computerisation now available to all businesses, it's not that difficult to set up instantaneous repricing along any distribution chain.

    I'm certain Amazon, to name but one, could implement instant repricing on currency fluctuations quite easily, if they chose to. While no outside agency forces them to, however, why would they?

    I've worked on both Forex systems and stock/sales systems in the past. If management wanted it, the changes would take less than a month, most of which would be taken up by testing. Come to think of it, most off the shelf stock and invoicing systems, that I've come across, already implement one or several levels of currency repricing because it's needed for EU transactions.
     
    Last edited: Jun 17, 2014
  5. Roger Hicks

    Roger Hicks Well-Known Member

    Well, except that first, pricing has to be based on historic cost in warehouse, not current Forex trading hysteria, and second, most people like to know what they're going to pay next week, never mind next month.

    Cheer,

    R.
     
  6. Sejanus.Aelianus

    Sejanus.Aelianus In the Stop Bath

    This is true, up to a point. However, if we look only at low mass, high value consumer products, I think the position is a bit different, for several reasons.

    Operations like Amazon spend a lot of time keeping their warehouses as empty as possible. They don't want the balance sheet cluttered up with any more stock than they can avoid, so they will push back stockholding to the next level, be it distributor or manufacturer.

    Moreover, a great deal of stock moves by air these days, so delivery times from the US can be as low as 48 hours and products can be moved in 24 hours, if there's enough overall demand to justify or sufficient spare capacity on a freighter (a 747 can carry nearly 150 tons). That cuts warehousing even further.

    When it comes to Internet sales, all the evidence suggests that consumer decisions are very short term, what matters to most customers is the price now.

    Personally, I think we'll see someone pick up on the profits to be made by tracking Forex rates, though whether it will be an established player, or a startup, remains to be seen.
     
  7. Roger Hicks

    Roger Hicks Well-Known Member

    True, but what of it? Distressingly few "low mass, high value consumer products" are made in the US any more. Indeed, distressingly few manufactured products of most kinds.

    Cheers,

    R.
     
  8. Sejanus.Aelianus

    Sejanus.Aelianus In the Stop Bath

    You're quite right. However, you can substitute Korea, Taiwan, China or any other Tiger Economy. There are big advantages to those low wage economies in selling for Dollars but paying their workers in the local currency.

    There was an interesting feature on "The Money Programme" a few years back, where they illustrated how well this worked for the selling country, especially if they wanted to buy a few F16s or the odd Guided Missile Frigate.

    ...and we think a Leica's pricey! :D
     
  9. Roger Hicks

    Roger Hicks Well-Known Member

    Then again, have you been following the Won, the New Taiwan Dollar or the Renminbi Yuan? I have to confess I have been lax in these matters. Besides, I imagine they've hedged the currency.

    Cheers,

    R.
     
  10. Sejanus.Aelianus

    Sejanus.Aelianus In the Stop Bath

    Not me. This is just the stuff I've picked up as a participant on the edges of these businesses.

    Jobbing data manipulators, like myself, pick up all sorts of esoteric info, as we flutter through the information industry of our fair land.
     

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