If your previously US-focused online store is now targeting customers in the UK, or indeed any other international destination, one of the first and potentially easiest things to do is to enable multi-currency shopping on your website.
The fastest way to put off an international audience is to make them see prices in an unfamiliar currency and have to juggle the mental load of working out everything in their home currency as they browse.
Seeing dollar signs everywhere will also make them fearful of incurring additional transaction fees via their card provider. Make it easy for them by showing prices in £GBP, $AUD or €EUR.
A standard feature of full service ecommerce platforms like Shopify and BigCommerce, and more bespoke offerings like Magento, is that enabling shopping and checking out in multiple currencies is available with a few clicks. Look for a 'currencies' section in your admin panel, and from there you can enable a range of international currencies.
You're then faced with a few decisions.
Firstly, you have a choice as to whether you want to simply display prices in foreign currencies, but have the actual transaction still take place in your home currency (which we'll assume to be $USD for the purposes of this article). Customers will at first be able to see prices in their usual currency (£GBP etc), including on the checkout, but then when confirming the actual transaction, a $USD amount will be taken from their card.
The upside of this is that you still receive $USD and avoid any conversion fees yourself. The two big downsides are that a) your customer is likely to incur an unexpected conversion fee from their card provider, because they're being charged in a foreign currency; b) they don't actually know what the transaction will cost until the money is actually taken. This can lead to confusion at best, and I don't recommend it.
Far better to display prices in the customer's home currency, and take the payment in their home currency as well. This is a much better customer experience. It does mean you'll be receiving foreign currency, which you can either choose to retain in order to pay out expenses in that currency, or convert at a time and cost that suits you. You can read more about the best way to do this in this article on banking and currency exchange for ecommerce brands in the UK.
This article assumes you're using one website to serve both a home and foreign audience, but if you've set up a dedicated website for your foreign customers, you can set the home currency of that website to be the preferred currency of the customers you're targeting. In which case, you don't have to set an exchange rate in the website admin area, but do have to manually convert all of your prices to the new currency using an implied exchange rate.
If you're serving everyone from the same website and have enabled multi-currency browsing and checkout, then you'll need to set an exchange rate between foreign currencies and your store's home currency.
Your default assumption may be that you should charge the same prices to UK customers as to your US base, using the latest £GBP-$USD exchange rate (which Google will show you as the top result of any search for GBP to USD). Ecommerce platforms like Shopify have built in tools allowing your website’s rate to fluctuate along with the daily market rate, although this is both unstable and messy for customers seeing prices to the nearest cent.
Instead you may want to set a fixed exchange rate, reviewed on a semi-regular basis, which is close enough to the current rate but is rounded up or down to give you cleaner pricing.
With that said, there’s nothing to stop you adjusting the exchange rate so that your £GBP prices are a bit higher or lower than what your $USD customers pay.
For example, when I launched my ecommerce brand in the US, our main product was priced at about £13 in the UK but $22 in the US. At the market exchange rates of the time, $22 was equivalent to about £16.50: I made a deliberate decision to charge US-based customers that much more. This was slightly easier to do given I had a separate website for North American customers - without that, then there'd be nothing to stop customers from simply switching currencies to the cheapest one (subject to them incurring additional card fees).
Why the higher price? Partly I was passing on to US customers some of the additional costs my brand faced when getting product over the Atlantic: shipping, export and duty costs, along with setup costs involved with the fulfilment operation. Higher prices also had the advantage of giving me more room for discounts and promotions targeted specifically at a US audience, especially around Black Friday.
But also I was charging what I thought the US market could bear. I knew my product was a one-of-a-kind in the US, and my market research led me to believe that customers would be comfortable paying that little bit more for a quality made-in-the-UK item.
There is no UK law mandating consistent prices across currencies, provided you don't mislead customers about the cost of a product.
Whether you're shipping your goods to customers from the US or from within the UK, this could be an opportunity to factor in differing shipping costs paid by UK customers. You might want to account for different order sizes so that your average profitability per order remains consistent, include the costs of currency exchange, or like I did, to recoup some of the additional costs of exporting product abroad.
Of course, if you're doing this, you don't need to create as large of a difference between prices as I did. But I'd say it's perfectly reasonable for US brands facing VAT charges in the UK to feel the need to increase their prices a little for a UK audience. It might also give you a little extra room for later discount and offers which you want only to apply to your foreign customers.
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Even if you haven't set up a UK or foreign-based distribution operation for your brand yet, enabling multi-currency shopping on your website makes sense. You'll be able to see if there's any initial appetite from shoppers abroad for your product, and give them a much more comfortable shopping experience.
Set an exchange rate that suits you, and your existing payment provider should be happy to receive foreign currencies. The question then becomes what you do with them and how you get foreign currency back into your home currency.
