Playing the weak dollar
The dollar is now 1.40 to the euro. If you are in a business that deals in foreign goods you should be up on the foreign exchange rates. So, who is in the foreign goods business?
The one that comes to mind immediately is the used auto-parts business. If you have a used BMW 300 series fuel pump that you are selling at the same price you did in June, you are throwing money down the drain. You should be re-pricing you inventory weekly based on the dollar exchange rate. But, you say, the US auction market for used auto parts isn’t responding that way. If you really think that way, I’ll take all the European car parts you have and hold onto them until it does. That should be about 30 days max.
If you are importing new goods from overseas, you best keep an eye on the appropriate exchange rate. Your current pricing strategy has to cover your replacement costs. It’s called inflation. If you sell your inventory for $1.00 and have to replace it at $1.25, who gives you the extra 25 cents?
Now a days everyone is importing some portion of their inventory from overseas. The exchange rate is important to all small business people.
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