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:
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.
BobW’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 bill and do 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?