It's a given that the US Dollar is considered the International currency. There are no doubt a large number of Canadian hosts who charge in US dollars on their sites. It makes me wonder how they have had to adjust their pricing over the past few years given the tremendous strength of the Canadian dollar.

A few short years ago, as a Canadian online merchant charging in US currency, we would enjoy cashing in every $1000 USD and see it convert to $1500+ CAD. Today, we're lucky to get $980 CAD. Quite a difference.

If you are a Canadian based host charging in US dollars, have you found it necessary to up your prices just to partially make up for the discrepancy in the exchange rate?

Vito

Blimey that is a big difference within just afew years.

I think the best option would be to sell your hosting products through Canadian dollars. In that case you could make twice as much in dollars, and still make a good profit for yourself.

If your target audience use PayPal then this would be very simple, if you stated what it was in other currencies.

Its the same with USD to GBP, the USD is very weak, We just have to eat the losses/profits, you cant go changing what currency you take payments. thats just stupid

That's why most hosts based in the UK sell in GBP.

If the target market is just Canadians, I can see selling in Canadian dollars. However, if targeting worldwide customers, I think you'd be pretty much forced to display pricing in USD.

Vito

For a start, Vito, you charge in more than one currency.

Managing two currencies is a real pain in the *** (believe me! I've been trying to do it for the last three years), but with the way the US Dollar is right now, the effort is probably worth it.

With two currencies, your Canadian customers can pay in a dollar that is actually worth something (:D) and your US customers can pay in their own currency (better yet, just ask them to whip out the Monopoly board. Monopoly currency is worth more than the US dollar!).

Anyway... once you have your two currencies, my vote goes for increasing your US dollar pricing. I'm sorry, but the Web hosting industry is no different to every other industry in the world (although many people seem to think otherwise). Every other industry in the world is increasing their pricing, so it's about time we followed suit! I would rather be in control of my profit rather than letting the brokers on Wall St decide how much I earn each month, but that's just me.

I'm not trying to speak for Andrew at Cartika Hosting, but they have recently changed to US instead of CAD. There is still an option for Canadian clients to pay with CAD. I personally started getting hit with fee's from my credit card companies for "foreign exchange" whereas they had never done this before. I’m pretty sure it’s because they could skim a couple percent off the top before and now they cannot. I’m glad Cartika stepped up to the plate on this one.

If the target market is just Canadians, I can see selling in Canadian dollars. However, if targeting worldwide customers, I think you'd be pretty much forced to display pricing in USD.

Vito

Hi Vito,

Honestly, all of these years, we have been charging in CAD$ and not in USD and have had no issue attracting a global customer set (I would say 90% of our customers are from outside Canada).

Having said this, the weakening US dollar or strengthened Canadian dollar (depending on how you look at it) has caused an effective rate increase for our customers. Additionally, US credit card companies have begun charging fees for foreign currency conversion (simply deplorable - we have been buying things in USD for years while the USD was worth ALOT more then the CAD$, and the credit card companies have never charged such a fee in Canada - I think the US banks were getting fat off of skimming % points, and now that they can no longer do this, they just charge a straight fee - which is absurd).

Eitherway, the switch to USD seems to make everyone happy, and we are just maintaining an avenue for those that still wish to countinue in CAD$ (ie most Canadian customers)

I'm not trying to speak for Andrew at Cartika Hosting, but they have recently changed to US instead of CAD. There is still an option for Canadian clients to pay with CAD. I personally started getting hit with fee's from my credit card companies for "foreign exchange" whereas they had never done this before. I’m pretty sure it’s because they could skim a couple percent off the top before and now they cannot. I’m glad Cartika stepped up to the plate on this one.

Thanks tcstatic - not a problem at all. The rising Canadian Dollar has actually helped us, so, switching to USD and giving our US clients cost certainty as well as fixing our expenses to revenue ratio (since they are in the same currency now) - just made sense for our business and our customers - even though we are taking a small hit on income (a few % points) - it is well worth it to clean this up and standardize everything to USD.

I think this also depends on what currency your costs are in and how much business is CAD and how much is USD. If you're spending $200usd month on servers, ideally it is now cheaper to convert the CAD, but you can just use the USD to pay for those boxes.

Hey Vito, glad to see you back on WHT. :wavey:

The AU$ is also very strong against the US$. I am sooooo glad we bill in AU$ and most of our costs are in US$. Got a bit lucky there, given the surge in the AUS$. It wasn't intentional, as our merchant couldn't bill in US$, so my only option was to bill in AU$.

If you are a Canadian based host charging in US dollars, have you found it necessary to up your prices just to partially make up for the discrepancy in the exchange rate?

Vito

We are started in Canada and have always enjoyed the exchange rate of the US dollar exchange, for us it sort of voids out after the conversion fees and merchant gateway fees per transaction.

To answer your question, no we don't find it necessary to up our prices due to exchange rate and any extra income in our favor is passed on in the form of value to our loyal customers:D

We have fixed priced in USD, CAD, GBP, EUR, AUD. Just last week, I emailed all our customers who pay in USD to say we'll be raising prices next year by 20-30% because of currency weakness and general increase in costs.

We have not raised prices in 5 years, and the compounded US inflation rate for the last 5 years is around 20%, so it's not such a crazy increase.

Unless there's some specific reason for U.S. customers to host in Canada or purchase from a Canadian company, then raising the price of hosting in U.S. dollars means you'll be less competitive to U.S. based companies that aren't having to raise prices.

Unfortunately, Canadian companies will probably just have to eat the decline in the U.S. dollar. The global economy generally likes a strong dollar because of this reason and a lot of foreign investments are made in the U.S. A weak dollar hurts those investors and actually reduces the trade deficit as the U.S. imports much more than it exports. U.S. customers tend to buy less from other countries when the dollar is weak because domestically purchased goods become a greater value.

Why do you think the Chinese have been so afraid of letting their currency rise? They fear we'll buy less because their goods will cost more!

Dang the automated email notification. Didn't realize there were replies in this thread. Thanks for all the input. Has helped me a lot. :)

The one statement that has really surprised me was
Honestly, all of these years, we have been charging in CAD$ and not in USD and have had no issue attracting a global customer set (I would say 90% of our customers are from outside Canada).
I have always believed that charging exclusively in CAD would pose a dramatic hinderance to gaining International signups.

I always figured that most shoppers related more comfortably to the commonly used USD.

I also thought that there was a psychological disadvantage to posting CAD pricing (when the US dollar was worth more). For instance, a few years ago, $9.95 a month USD was equivalent to $14.95 CAD. And if someone took the time to do the conversion, they would see this. But from a psychological standpoint, I felt that the immediate impression of seeing $14.95 versus $9.95 would perhaps drive some people elsewhere.

As well, I suspect that International customers might have been somewhat irritated over the past couple of years since the CAD has been continually gaining strength, and this would ultimately reflect every single month in their cc statement after currency conversion.

Vito

The currency craziness has made it affordable for us to order hardware in the USA, even when you account for duty, shipping etc.

So far, so good.

I have always believed that charging exclusively in CAD would pose a dramatic hinderance to gaining International signups.

I always figured that most shoppers related more comfortably to the commonly used USD.

Hi Vito, most international customers really do not care. I will say that it may have an impact to US customers, but, since the Canadian Dollar was historically worth less, it was just viewed as a discount. I have no way of knowing with 100% certainty whether it cost us any business or not, but, from what I can see, I do not believe it was much of a factor at all (positively or negatively)

I also thought that there was a psychological disadvantage to posting CAD pricing (when the US dollar was worth more). For instance, a few years ago, $9.95 a month USD was equivalent to $14.95 CAD. And if someone took the time to do the conversion, they would see this. But from a psychological standpoint, I felt that the immediate impression of seeing $14.95 versus $9.95 would perhaps drive some people elsewhere.

I understand what you are saying, but, that was never our intention. For us, our prices were our prices (ie we would not have been "cheaper" if we presented in USD). Originally, most of our clients did come from Canada, so the CAD$ was just meant to act as a "discount" for US customers. Having said this, as business evolved and more and more business came from the US, the weaker CAD$ certainly did hurt us. Now that the currencies have flipped, we are happy to standardize on USD as everyone seems happier this way.

As well, I suspect that International customers might have been somewhat irritated over the past couple of years since the CAD has been continually gaining strength, and this would ultimately reflect every single month in their cc statement after currency conversion.


Yes, this certainly did happen, but, it really only impacted US customers. The CAD$ really hasnt moved that dramatically next to the Euro or the UK pound. Having said this, people are used to dealing with foreign currencies (much more today then previously) and especially with services like hosting, etc... If I had my way, I would standardize on the Euro and not USD - but, that would mean more complex changes to our pricing, etc - and frankly, just isnt worth it...

I guess the jist of what I am saying is to not be concerned with currency as much - my findings have been that people will very rarely make a purchasing decision - and especially an internet purchasing decision - based on currency. If they are going to buy your product or service, they will do so regardless of which currency you are dealing with.

We need a one world time zone and one world currency.

*flame proof undies on* :D

Seriously, just imagine how simpler things would be, given we're moving towards a more global way of doing business.

We need a one world time zone and one world currency.

*flame proof undies on* :D

Seriously, just imagine how simpler things would be, given we're moving towards a more global way of doing business.

I'd be totally open to one that is internet-only, e.g. some sort of ecurrency that can function with all banks & markets equally. There's no such thing as a 'one world time zone' though, 1pm here can't be 1pm in Aussie-land. ;)

We need a one world time zone and one world currency.

*flame proof undies on* :D

Seriously, just imagine how simpler things would be, given we're moving towards a more global way of doing business.

Well - for timezone we have GMT - I really like that system... as for currency - we will get there - jut probably not in our lifetimes... In the interim however, I think currencies have become less and less important to businesses and consumers... but, that is just a guess based on our customer feedback....

I'd be totally open to one that is internet-only, e.g. some sort of ecurrency that can function with all banks & markets equally. There's no such thing as a 'one world time zone' though, 1pm here can't be 1pm in Aussie-land. ;)

nice idea with the ecurrency

I would love a one-world currency. Just as long as it does not come with a one-world dictatorship. ;)

As far as the USD vs CAD issue.. we've been getting nailed with this. The value of my business has declined 35% over the last three years just due to the lower USD. (I'm a Canadian incorporated company, doing business mostly with US customers.)

Even worse -- I live in Europe. So my revenue is in USD, my accounting is done in CAD, and I paymyself in EUR. Life stinks. :(

Personally, I don't think there is much of an alternative. I've seriously considered switching to CAD pricing, but I believe it would result in the lose of many US customers.. most of whom are very patriotic and would likely consider it their "duty" as Americans to pay in USD. (ie: Switching to CAD currency would make most of my customers realize they are doing business with a Canadian company.)

Most US folks are deathly afraid of foreign money.

Besides, I don't think my US customers would like seeing "exchange rates" and "foreign conversion" on their credit card statements... and their pricing would fluctuate and (most likely) get worse every month.. which would further cause me to lose more problems.

So... I feel there is no choice but to absorb the lose of revenue while the USD continues to sink lower and lower, with no end in sight.

The only possible solutions I can see:

1. One-world currency.
2. Target the Canadian (or Euro) market instead of US.
3. Move to the US.
4. Increase business by 35% to offset loss of revenue...

Vito, if you can think of any other solutions then please let us know! :)

I've seriously considered switching to CAD pricing, but I believe it would result in the lose of many US customers.. most of whom are very patriotic and would likely consider it their "duty" as Americans to pay in USD. (ie: Switching to CAD currency would make most of my customers realize they are doing business with a Canadian company.)

Most US folks are deathly afraid of foreign money.

Besides, I don't think my US customers would like seeing "exchange rates" and "foreign conversion" on their credit card statements... and their pricing would fluctuate and (most likely) get worse every month.. which would further cause me to lose more problems.


are you basing this on anything or is it just an opinion. I understand alot of people share this opinion, but, I think you are misjudging the American population on the whole.

Up until this month, we dealt with solely CAD$ transactions and had no issue what so ever working with US clients - either acquiring or maintaining them. Currency fluctuations didnt affect us at all - and until now when the dollar actually surpassed the USD, it would not have been an issue. I dont even think it would have cost us any customers - we made the change simply to `give back`to our customers and say hey - if the cad$ is going to be valued more then the USD, we will swallow the currency loss and give you the cheaper currency - customers buy a service - and frankly, if you are providing the service they require, they care not about currencies and such things - at least, that has been our experience...

Hi,

I have charged both in CAD and USD one one hosting site, it did attract a lot of custmoers from the south US. Having said that Budget Host has only ever charged CAD and has a lot of international customers.

I have not had any negative feedback on exchange from our US customers.

Marc

I'm basing my opinion on my personal experience from talking to many Americans over the 5+ years I lived in 3 different States.

Maybe the general American thinking and mentality has changed in the 10 years since then.. but I doubt it.

The vast majority of people I dealt with (general population, as a business owner) did not want to deal in foreign currency. The thought of paying in another currency was an afront to their sense of patriotism. (Unless they were specifically in the import business.)

I think ultimately it depends on your target market. If you have a targetted market or some unique service, then you can probably get away with charging in a foreign currency. But if you are searching after general US consumers who are looking for some generic service/product (ie: general hosting) that they can find in either CAD or USD.. then I think the average Joe is much more likely to pick the company that charges in USD.

I hope that makes sense. :)