Today, we have Shane Slater, Corporate Currency Specialist from FirmaFX. He talks about foreign exchanges, how it impacts business owners and how you can do better than just taking what the bank or your credit card will give you.
Episode Highlights:
- 1.15: Shane is a corporate currency specialist which means he helps SMEs who get exposed to international business and FX dealings on a regular daily business.
- 1.44: We are reducing the margins that the big banks are typically known for and providing services or advising when the rates may go in the company's favour and when there is an opportune time to do an exchange, says Shane.
- 4.09: The exchange which is in labor intensive and there is no material cost is quite excessive. You can get well under 1% depending on your volume and its better ease and convenience type situation, explains Shane.
- 4.26: The exchange rate is what it is, but if you are losing 3.5% on hundreds of thousands or millions of dollars each way from your profit that should be going to your pocket to reinvest in your business is not good.
- 5.33: On the minimum about $10,000 per transaction is a point where you are going to start saving 2 to $3 per transaction using a broker from FirmaFX, says Shane.
- 06.00: Shane talks about the challenge for business owners in international wire transfers and how he helps them with that.
- 10.12: The currency hedging is the idea to guarantee you price point for at least some of your exchange so that you have the peace of mind of knowing exactly what you're going to pay or exactly what you're going to receive.
- 15.24: Jason explains that you don't have to be able to calculate all the stuff in hedging transactions because in principle the contracts are very straightforward for people.
3 Key Points:
- Shane talks about the costs associated to the consumer or the business owner when making a currency exchange.
- Hedging is basically a process where you eliminate risks. Shane talks about what can be done to mitigate the risk of fluctuation of currency when you have business in one country, and you are delivering stuff in another country.
- Hedging strategies change depending on every single client's position and need like what are your potential waters or what is your actual margins. If you're a tight margin business, Shane recommends hedging a good portion of your FX.
Tweetable Quotes:
- "We are able to save companies not just money, but time also that they can then put back into their business and doing what they do best and help them grill in a multiple of ways." - Shane
- "Some businesses consider hedging like gambling, but it's the exact opposite. But the general concept is you are exposing yourself to sometimes millions of dollars throughout years on a FX rate and they are budgeting this FX rate for your currency exchange." - Shane
Resources Mentioned:
Full Transcript
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