First a bit of background:
I'm a Canadian, living, operating, and incorporated in Canada who will be charging $X/month for my service. Monthly expenses such as hosting are all US based and charged in $USD.<p>When it comes to charging should I tow the GAP and charge in $USD or go for $CAD? Only advantage to me in charging in $CAD is that I avoid currency fluctuations on the revenue stream as opposed to charging in $USD and converting to $CAD. For those who do not realize it, the $CAD is around $1.04USD right now whereas it has been as low as $0.65USD in the past decade. So as you can see, from a cash-flow management perspective, a bad exchange rate could be quite damaging to the business (OTOH a great exchange rate could be a boon).<p>To other Canadian operations: What do you do to manage the currency fluctuations?
Charge USD. Anytime I see a bill in CAD I immediately start worrying about conversion rates and possible customs charges, and if I can get the same thing for within 5% by doing a USD transaction I will.
If you were using paypal then it would allow the user to pay in any currency and in a way increase the target audience and wouldn't possibly put a buyer off.<p>If you are worried about currency fluctuations, would it be possible to have a US bank account which profit would enter which would then be used to pay for anything US based therefore decreasing risk when converting $CAD to $USD? If so, then you would only transfer money to $CAD when the currency rate falls into a certain range for example 0.95-1.xx
I'm operating from Iceland (<a href="http://pagekite.net/" rel="nofollow">http://pagekite.net/</a>), and decided to simply let the user choose: I offer prices in USD, EUR and ISK. The prices are roughly comparable, but I don't bother making them match exactly - exchange rates fluctuate too much and I figured it was more important to be user-friendly by offering stable, understandable prices in a currency the user is comfortable with.<p>We launched so recently that most of our users are still working through their trial period, so I haven't actually gotten many sales or much feedback on the system yet. So I can't say how well this is working in practice.<p>I'd love to know if people here think this is a good or a bad strategy, and why.
As someone who lives in the UK, I almost see dollars as monopoly money, I just can't easily interpret the value properly. For example, if something I wanted was $10, I'd snap it up, whereas if it was £5 (~$8), I'd think twice. You'd think it would be the other way around given that each pound is worth more than a dollar, but I guess you just give greater value to the currency you use everyday.<p>Though I wonder, would you generate more sales selling a product for £6, than you would selling it for $9? And could you switch your pricing from $9 to £9 (~$14.71) and maintain a similar conversion rate?
If most of your costs are USD and most of your clients want to pay USD why not open a USD account with your bank and be done with it?<p>Figure out the most fluctuation you could handle and put a note in your TOS that you will adjust the pricing based on USD/CAD exchange rates if they go outside of a certain window. Alternatively, you could bypass this calculation and just purchase a CAD futures contract from your bank.<p>Seriously, worry more about getting customers than how the USD/CAD exchange rate will vary over the next year or two and you'll do fine. It's more likely that the CAD will go to .80 than 1.20 because Canada exports 80% of it's goods to the US and a devalued currency is better for exporting countries.