Recently, I launched a new selection of products. This time, my new product line is a selection of language learning courses. Right now, I am offering courses in just two different languages, but I have plans to add several other languages as well.
The product launch went over very well, with many sales. I was quite happy with how that went. It made me realize that I had been missing the boat on these courses, as I had been procrastinating on launching the products for at least a year. I should have done it earlier.
Today, though, I got a bit of a surprise. Somebody named BobW left a comment on my site, saying this:
Hi, Bob.
I was just reading your article/ad for your language courses, as I’m considering moving to the Philippines. The only question I have is, why are they priced in US dollars, as opposed to local currency?
Well, my first reaction was why would he care what currency I use for pricing? I mean if you purchase my course, and pay with a credit card that is denominated in Pesos, you will be billed in Pesos by your credit card company. If your credit card is from the UK and denominated in Pounds, you will be billed by your credit card company in pounds. It simply does not matter.
Bob’s comment got me thinking, though. Why do I price my products in US Dollars?
Let me think of a few reasons:
- The most important reason is that about 75% of my customers that I deal with are Americans. Americans use US Dollars for their currency. Since the vast majority of those who purchase from me are Americans, it is logical to bill the products in Dollars. Don’t you think?
- My businesses are US Registered. For record keeping purposes, it is much more simple to a bill and does business in US Dollars. There is never any question about the conversion rate and such.
- Another big reason is that under Philippine Tax law, foreigners who live in the Philippines must pay Philippine taxes on income that is derived from the Philippines. If you derive your income from another country, the USA in my case, there are no Philippine taxes due. If I price in Pesos, it may be construed to mean that I am intending to attract people in the Philippines as my customers. Truth is, I try not to do business with people in the Philippines for the express purpose that I do not want to expose my income to Philippine taxes, and the hassles that come with taxes due in multiple countries.
Those are few of the reasons why I price my products in dollars. There are other reasons too, but these are the most important reasons.
A few years ago, when the US Dollar really started sliding in value, I tried a bit of an experiment. I started pricing on just one of my websites in Euros instead of US Dollars. I did it for about two years. The experiment went bust big time. One thing I found out what that my customers who were largely Americans didn’t understand what a Euro was, or the whole “different currency” thing. It was not natural to them, and a lot of my customers went away without buying because they simply did not understand what was going on with this “Euro” thing.
After trying that experiment, and seeing how it all worked out, I decided to keep it simple, and always price in dollars. Yes, I live in the Philippines. My customers are Americans mostly, though, and I believe it’s best to do things in a way that is most convenient and understandable for my customers. I don’t see a problem with that.
What about you… what currency do you price your products in?
Bob, I think many of the questions about “local currency” stem from the fact that while people can grasp many of the concepts of learning online, they can’t seem to get their head around the idea that one’s market doesn’t have to be the country in which they choose to live.
Just recently I read a comment on a “make money” type blog (run by an American who lives in the Philippines). The fellow making the comment went on and on about the “sad fact” that although he had many good ideas on how to make money online, he was severely handicapped by the fact that he lived in “far out” and “backwards” New Zealand.
I think he had failed to follow along enough to realize the writers on the blog he was commenting on lived right here in the Philippines. Somewhat unclear on the concept, one might say.
Not only can you live where you wish to live, but you can earn in whatever currency you wish also. One might well imagine that with some of the currency problems in Europe these days, being able to click a menu selection and start earning in US Dollars instead of Euros might be quite advantageous to some folks. Freedom’s a wonderful thing.
Hi Dave – You may just be correct on that. People just don’t understand that where you are physically located, what currency they use in that location and such other mundane matters just don’t matter any longer. No matter where you are, you can do business as if you are anywhere else! In my example, I could sell my language course in Euros if I want, and set up a website with an .eu domain, people might think I’m in France, Italy or even Germany. I could also set it up to sell in Australian $, and have a .au name. It just doesn’t matter where we are, whether we are buyers or sellers, we can use the Net to “be anywhere” that we choose!