NZ manufacturers should be selling product in NZ dollars

[BIRMANBOY]

With all the ongoing complaints from all sectors (other than importers) that the NZD is "too high", perhaps its time to explore the option of pricing and selling our commodities and exported products in NZD as opposed to being pushed around by the swings in USD.

[fungus pudding]

With all the ongoing complaints from all sectors (other than importers) that the NZD is "too high", perhaps its time to explore the option of pricing and selling our commodities and exported products in NZD as opposed to being pushed around by the swings in USD.

What on eath does that mean???

[BIRMANBOY]

Exactly what it it says...instead of selling your exported goods and receiving USD in payment...request NZD. This way the seller can set a desired margin and realise this amount. At the moment if you get paid in USD you realize a greater or lesser amount in NZD because of currency fluctuations. If you get USD and for example have a USD bank account here in NZ at some point MFR here will have to exchange these to service purchases /wages/overheads etc. If you receive NZD it takes away the uncertainty of profit (or reduced profit) margins. Is that clearer?

What on eath does that mean???

[fungus pudding]

Exactly what it it says...instead of selling your exported goods and receiving USD in payment...request NZD. This way the seller can set a desired margin and realise this amount. At the moment if you get paid in USD you realize a greater or lesser amount in NZD because of currency fluctuations. If you get USD and for example have a USD bank account here in NZ at some point MFR here will have to exchange these to service purchases /wages/overheads etc. If you receive NZD it takes away the uncertainty of profit (or reduced profit) margins. Is that clearer?

In any transaction using different currencies someone has to take a risk if credit is involved. If it's the buyer, he'll build it into the price he is prepared to pay, just as the vendor should build in a margin if he is the risk-taker. It's probably much more important to realise that the NZ dollar isn't too high. It appears that way against $U.S because theirs is low - but we have to get used to that. 80 odd cents to their dollar is the new normal.

[BIRMANBOY]

Yes well my point is that most of the time its the the NZ supplier "who takes the risk". This is far too passive and allows the buyer all the control. Instead of taking the position of being positively gratefull for sales ..at any cost..we should be setting the circumstances in such a way that the buyer takes the risk. Especially for producers of prime products and commodities which are in international demand. We allow ourselves to be dictated to instead of saying...look here is our product..you know its good and we know you want it so here are our terms and conditions..(nicely of course).

In any transaction using different currencies someone has to take a risk if credit is involved. If it's the buyer, he'll build it into the price he is prepared to pay, just as the vendor should build in a margin if he is the risk-taker. It's probably much more important to realise that the NZ dollar isn't too high. It appears that way against $U.S because theirs is low - but we have to get used to that. 80 odd cents to their dollar is the new normal.

[POSSUM THE CAT]

It is plain common sense to price goods you sell in the currency you wish to be paid in. Or is this to strange for University Graduates to understand. You do not sell a car & accept payment in cigarettes or Beer

[BIRMANBOY]

Unless you're a kiwi who appear to really value those items.. I'm an importer and over 25 odd years have always been asked to pay in USD so I have seen my costs go up and down from 0.48 to 0.83 which is a huge difference in my landed costs. I just find it strange that apparently mfrs and exporters have allowed their buyers to pay in USD ..regardless of what that did to their margins. I know many do hedge their sales by currency contracts but I'm curious to find out if actually there are some who do ask for NZD and what happens in those instances.

It is plain common sense to price goods you sell in the currency you wish to be paid in. Or is this to strange for University Graduates to understand. You do not sell a car & accept payment in cigarettes or Beer

[fungus pudding]

It is plain common sense to price goods you sell in the currency you wish to be paid in. Or is this to strange for University Graduates to understand. You do not sell a car & accept payment in cigarettes or Beer

Why not? It might be a better deal than the cash. Remember Arthur Dailey.

[JBmurc]

yes is happening worldwide Aussie just signed up currency deal with China to trade in their own currencies for many of their own products ...we also need to do the same ,,,,guess the reason why for decades the USD has been seen as a strong safe haven trade dollar (at one time with Gold backing)now as the USA biggest export is the USD many exporters are getting sick of the devaluing currency......the pound was replaced by the US dollar for the same reasons..whats next ..

[JBmurc]

yes is happening worldwide Aussie just signed up currency deal with China to trade in their own currencies for many of their own products ...we also need to do the same ,,,,guess the reason why for decades the USD has been seen as a strong safe haven trade dollar (at one time with Gold backing)now as the USA biggest export is the USD many exporters are getting sick of the devaluing currency......the pound was replaced by the US dollar for the same reasons..whats next .. IMF believes the Chinese dollar will replace the USD 3-5yrs time