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  • Please see the most recent updates in the "Where did the .com name go?" thread. Posts number 16 and 17.

    Post 16 Update

    Post 17 Warning

Exchange rates

bazzar

bazzar

Charter Member 2018
Hi people,

There is an effect of the GFC which people may not realise is having a major impact on Flight Sim production here in Australia and some other countries.

You see, Australia is one of a very few countries where the dollar is strong. Today it buys $1.07US.

When I started this company it bought 55c.

If you look at it this way, that is a 50% drop in revenue for no other reason than the price of the dollar. Our prices, for example, have not been raised in that time. You can still buy a Spitfire for US$19.95. That's a little over $18 AUS Not so long ago it was $38AUS.

It's a little like getting a 50% pay cut handed to you at your place of work.

Now, with today's demands for bigger, better, more complex models, more technically advanced programming, more textures and so on, it is going to be increasingly difficult for some companies to keep prices where they are.

So, if you do see companies withdrawing from the open market, or apparently raising their prices, this would be a major reason.

We're not going anywhere but I thought you might be interested.:engel016:
 
Yes, with my own upcoming release I have been keeping an eye on the dollar and it jumped 2 cents today! Good news if you're buying goods from OS, not so good if you're an exporter.
 
Thats the problem I guess with selling products attached to the US dollar and living in Australia

You could do it the other way (which makes it more expensive for some customers sometimes but at least you don't do yourself in..)
 
Yes, It think that it is an issue. The UK/Europe has been a similar problem. I cap my aircraft purchases at £25. Lately, I have looked at some aircraft, but they would cost me about £40 - which I just can't justify to myself.

Still, things will probably change again in the future....................

Cheers

Paul
 
Baz, do you think that raising the prices moderatly would have a negative impact on your sales? I as a customer wouldn't mind, but that's just me. Your reasons for that are clear and comprehensible.

I'm not a banker, but I sometimes think that in this globalized world market there should be a rock-stable world currency that should be used for international business. This way, there would be only one variable factor (local currency) and not two (local+us dollar) in the equation. I think I have to ponder about that in a pub with a friend over a few beers :)


Best,
Mark
 
Hi Mark,

I agree but I don't think we will ever see it. We have a problem here in Oz with manufactured items. The market is now flooded with Chinese goods. I am soirry to say that the majority of them are way below par and frankly unmerchantable.

I bought some woodscrews the other day for a fencing job using soft pine. After three turns the screw I was using snapped off. I guess retailers here are finding it hard to resist buying overseas and at the cheapest prices they can get. Unfortunately it is us consumers that eventually pay the price.

Personally, if you want my opinion, I think this thing is going to burst. You don't get rich buying things. You need to sell. unfortunately, right now, Oz is a very expensive buy.:engel016:
 
yup the exchange rates are a right bugga to be sure!

say for example i put a plane up at $20USD to keep the yanks happy ... it'd be ... £12.08 .. now as i'm UK based if i set the price at £20 it'd cost $33.10USD and most likely classed as overpriced!

Might not seem like much .. but lets crunch some numbers ..

say i sold 50 planes at $20 .. thats $1000 which is £603.83 (about 2 months rent)
now, say i sold 50 planes at $33.10 .. thats $1650 which is £999.67 (about 3.5 months rent)

So what do you do .. take a massive cut for no other reason than a weak doller (not my fault!) or set it at $33.10 and put up with the overpriced claims?? Loose-loose situation really :frown:
 
I was at the Dogwood festival in Atlanta this past weekend and my wife and I saw many pieces of art that we actually liked, but they were priced from $150 all the way up to $3000. Needless to say we walked on.

Then we came to one guy who made flowers out of old spoons, which sounds a bit naff, but actually looked quite good. He was selling his for $50 and told us he'd arrived on Friday with 40 of these and only had the 5 on display left.

There are so many factors that go into setting a price, but when something is a discretionary purchase rather than a need then the less it costs, the less thought is required to justify that purchase and the more it sells.

A high quality add-on these days is typically in the $30-45 range. Which seems quite reasonable, doesn't require too much justification and should accomodate all but the most excessive exchange rate fluctuations.

Having moved from the UK to the US right when the rate was 2:1 and having to continue to pay stuff in the UK, I can completely understand the hurt that exchange rates have. Unfortunately with the way the US economy is going it doesn't look like it will get better anytime soon.
 
Foreign exchange rates have forced me to clamp down. It made sense for me to pick things up through the years and put them away in time of need. My grandparents always told me, what comes once, comes back again, eventually.

Due to the current state of economy, that "product" of consideration will have to be of considerable quality to be considered. And, is it needed?

Batten down them hatches. We're in for a long rough ride!
 
Any business exporting goods to America will be feeling it right now. I don't think that it is necessarily correct to raise prices because of a weak US dollar. It is not the fault of the average consumer after all. Dollar for dollar, Americans are still paying the price they always have.:engel016:
 
Depending on what your after, exchange rates are either a gift or a curse.

For example, with the strong Australian $ I've been buying books madly over the Net. Getting great benefits. Effectively works out that one in three is free, compared to the old exhange rate of a year ago.

Almost anything imported these days is a good deal. Except products from China. They are just junk.

But I feel your pain Baz. Trying to run a business that relies heavily on export orders is doing it very tough. All you can hope for is that the American economy recovers quickly and the exchange rates settle down.
 
As someone who was paid in dollars, but lived in EURO (and Deutsch Mark ) Land for some ten years, let me just say....


HAH! :wavey:



And you don't EVEN want to know what my trips to the UK used to cost me!!

Seriously, sometimes these rates move in your favor, sometimes they don't. However, you can play the game too by purchasing currency when its down, and selling when it's high. Absolutely no law against it.

'course, you can get skinned too.....

Interesting though...who knew we'd be discussing exchange rates on a flight sim site....
 
Sad state of affairs these days... my stash of cash I use for purchase of fine aircraft is going for gas now.
 
Pips said:
Almost anything imported these days is a good deal. Except products from China. They are just junk.
Click to expand...

Not really true, buy 'cheap' and you get crap.
Before we sold up the family Marine Supply business we were forced into dealing with China.
If you don't then you are out of business, period!
However, by making frequent trips to China and dealing direct with manufacturers, including to accept ANY goods below our required standards, we managed to eliminate the 'Cheap Chinese' label.
It worked.
The opposition had been buying in (for example) life jackets at a cost of A$2:50 and retailing for A$9:99, our approach was to pay A$3.75 and sell for the same A$10:50.
After a couple of months our sales rocketed, the 'cheap' jackets were falling apart without being used.

Of course, there are plenty of people out there with a 'Walmart Mentality', stuff 'em!
:173go1:
 
stiz said:
dont you guys start moaning about the price of gas/petrol till you've paid our rates! :bump:
Click to expand...

Lets try and keep this from getting hot ok?? for what its worth, I agree.. we americans have had it pretty good. Please, lets let it lay with that and not continue this particular chain of thought.
Thanks
Pam
 
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