Avoid the “Dollars Only” poison pill for Forex Transactions

Posted on November 17, 2010

American exporters, who take the position of only doing business with overseas customers who are willing to settle with US Dollars, make themselves particularly vulnerable to competition willing to quote in local currencies.  A company shows their professionalism with a willingness to handle their transactions in any freely traded currency.  This flexibility isn’t unusual in most foreign markets, actually in most cases it’s business as usual.  Foreign vendors as well as foreign customers have the same interest in counterparts who make things easier for them, and being savvy in the area of foreign exchange is right at the top of that list.

Historically, U.S. importers have always been more flexible in searching out the various advantages to be found while investigating different off shore vendors.  They’ve known for some time that taking control of the inevitable currency transaction, most often results in lower costs for the materials they purchase.  It’s taken a while, but U.S. exporters are beginning to see the light as well.  They’re concluding that asking potential clients to do business only in Dollars isn’t jut impractical, it’s a poison pill that can have devastating effects on an international strategy.

The old axiom, “In for a dime, in for a Dollar…” may still be true in a lot of instances.  But a new one that says, “In for a Dollar, in for a Euro, Pound, Peso or Yen…” seems to be making a lot of sense to internationally active companies these days too.

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