The future of ecommerce in Ireland is dictated by 2 elements.
- Currency rates
- Transport Costs
Most business owners cannot control currency rates, yet they effect their business hugely. What ecommerce site owners can do to isolate themselves from rate changes is accept payments in dollars into a dollar account. This way if you have to pay a supplier in dollars you have the funds to hand in the local currency and you pay no foreign exchange rates.
Case Study for foreign exchange:
A Jewellery manufacturer has to purchase their gold in its raw format in dollars. They have customers across USA, Europe and Asia. So they accept payments in dollars and store these funds in a dollar account. This isolates them from a currency fluctuation as they do not have a foreign exchange transaction to pay for their raw gold. Instead of hedging currencies and try to second guess the market why not keep a dollar and or sterling account for these purposes. Your accountant will show you now to account for these in your final year end books. Be aware it is difficult to setup a dollar account at the moment in an Irish bank. There are online only banks who deal in dollar accounts.
Tip : encourage your customers to pay in their local currency. Its easier for them to understand the price and it allows you to build up a currency reserve.
Transport Costs :
Because we are an island there is a high cost in getting product off and on to Ireland. However this is not always the case as some logistics companies use Ireland as an international hub for shipments. Because Irelands Airports are relatively cheap to fly in and out of this makes it more attractive for shippers. The Shannon free zone in Limerick allows for the transportation of products tax free once they are in transit. This provides opportunities for Irish based ecommerce stores to piggy back on the excess space in-transit. Couple this with the fact that the island is a logistics savy it makes transport relatively cheap considering our location.
If you have alot of online business in other countries you may consider opening a local warehouse to service these customers. If you are not quite there but want to start testing you can use the services of a local drop shipper who will store and ship small amounts of your product. It saves you having to rent a warehouse, staff and all the other overheads that go with running a warehouse.