It was just 8 months ago that I posted about changing our store’s primary currency to US dollars instead of Australian dollars. I made a strong argument for it here, the main motivations being:
- We were getting hammered with currency conversion fees. Customers would pay in AUD, but most of our expenses were in USD so by moving to USD, we hoped that we could streamline our cash flow.
- Exchange rates were making things difficult. Most of our materials and costs were incurred in US dollars and as our Australian dollar kept falling, we had to regularly increase our prices to maintain profitability.
- Our customers often complained about the price hikes so we hoped that by charging in USD our prices wouldn’t fluctuate.
- We were becoming more and more global as a company, so why bother with AU dollars anyway?
So we gave it a shot and converted our website to operate in US dollars. We also set up a USD account with our bank, and set about optimising our business model.
Unfortunately, we quickly realised that converting to USD wouldn’t be the silver bullet we had hoped for. Firstly, It turns out that PayPal won’t pay USD into a USD bank account so long as it is with an Australian bank. Even if you’ve got thousands of USD sitting in your PayPal account, if you want it in your USD bank account, when you move the money PayPal will charge you a conversion fee to AUD, then your bank will charge you a conversion fee back to USD. Stupid right?! Well that scratches benefit “1.” from our list.
It also turns out that our build costs didn’t stabilise as much as we had hoped either. Some manufacturers (e.g. the company that makes our fans) recently put up their prices by around 40% irrespective of exchange rates. This means that in spite of our best efforts our retail prices are still at the mercy of our suppliers and we still may have to change our prices from time to time. So scratch “2.” from the benefits list as well.
Regarding customer feedback, we did see an end to the complaints associated with regularly jacking up our retail prices, but instead we received a lot of new queries from customers who wondered “You’re Australian, so why are you charging in USD?”. This was profoundly motivating because it shows that we really do have an Australian identity, and when we charge in a foreign currency it confuses our customers and sabotages our image that has taken years to build. We want our customers to know that we are Australian and we want there to be no doubt that we still assemble and test our products in-house.
For these reasons, we’re switching back to Aussie dollars (also known as “Lobsters and Pineapples”) effective today!
Finally, as I type up this post and Brooke is hard at work altering our web store I feel inclined add that the move back to Australian dollars just feels right. We’re proud to be Australian and we’re proud to be changing the way that people make beer all around the world, from our small workroom here in the Illawarra. We are a global company, but Australia is our identity and there is nothing wrong with trading in Lobsters and Pineapples.