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How to Use Foreign Currency Rate Fluctuations to Your Advantage as an Affiliate Marketer

When I started affiliate marketing back in early 1998,
getting paid in U.S. Dollars was a huge bonus to me as a
Canadian resident
.

At that time, one US dollar was valued at $1.43 Canadian. By
late 2001, the greenback translated into $1.60 Canadian.

Woohoo!

Even if my merchants' product prices and commission rates
remained the same, I got a raise simply by virtue of
fluctuating foreign currency rates
.

For example, let's say that one month I sold 100 dating
service memberships at $29.95 for a 50% commission and
earned $1497.50 US. In January 1998 that $1497.50 was worth
$2141.42 Canadian, and by November 2001, it was worth
$2396.00 Canadian dollars, or almost $255.00 CAD more than
in 1998!

Unfortunately, the U.S. greenback has been slipping steadily
against other currencies since early 2002, and on January
14th, 2005, it was worth $1.20 CAD.

Using the example above, my $1497.50 USD commission check is
only worth $1797.00 CAD in January 2005 - a whopping $599.00
LESS than it was worth in late 2001.

Affiliate marketers in many other parts of the world faced
the same scenario
.

Here are some examples of how the US dollar has been
performing against various currencies since early 2002.


British Pound


January 2002 - 0.698241 GBP


January 2003 - 0.618284 GBP


January 2004 - 0.547846 GBP


January 14, 2005 - 0.53124 British Pound



Australian Dollar



January 2002 - 1.93418 AUD


January 2003 - 1.71592 AUD


January 2004 - 1.29591 AUD


January 14, 2005 - 1.30581 Australian Dollar



Euro


January 2002 - 1.13226 EUR


January 2003 - 0.941605 EUR


January 2004 - 0.791328 EUR


January 14, 2005 - 0.75643 Euro




Those are fairly sizeable drops across the board... and a
pretty depressing situation for non-U.S.-based affiliates
who earn their incomes in US dollars.

However, there are a couple of things affiliate marketers
can do to protect their affiliate income
from these
disastrous declines.

The first option is to work about 25-35% harder to bolster
revenues to 2001 equivalent values.

However, because I'm basically lazy, working harder is never
my first choice.

The second option involves using foreign exchange rate
changes to your advantage
by selling products offered by
merchants located in your own country, priced in your own
currency.

For example, although Canadians are less resistant to
purchasing in U.S. dollars now that the Canadian dollar is
so strong, they still hate to see a $120.00 charge on their
credit card for a $100.00 item. Logic aside, something tells
you that a buck should be a buck, and anything more feels
like a rip-off.

The primary benefit of promoting 'local merchants' is to
help your visitors save money by reducing shipping costs and
eliminating customs duties on goods imported from the U.S.
Basically, most of us prefer to shop locally if we can get
the same product at the same or lower price.

Your task then is to find merchants that price products and
pay their affiliates in your own currency
.

That unfortunately is still easier said than done.

The pickings were pretty slim when I searched Google for
"Canadian" "affiliate programs".

A site that listed itself as a directory of Canadian
affiliate programs - wasn't.

Furthermore, most of the Canadian merchants that set
Canadian dollar prices on their sites, either pay their
affiliates in U.S. dollars, or are affiliated with networks
that pay affiliates in US dollars.

U.K. affiliates will have an easier time finding U.K.-based
merchants that pay in Pounds Sterling
.

Check out the the following UK affiliate networks and
directories:





Here's something to watch for if you decide to affiliate
with merchants who work in your own currency.

At Commission Junction I discovered that if you promote the
Canadian Shopping Channel which sells and pays commission in
Canadian dollars, your commissions are first converted to
U.S. dollars for CJs purposes
, then back into to Canadian
dollars when they deposit the commissions in your Canadian
dollar bank account.

Youd lose money each time the commission went through the
exchange process.

To avoid being penalized by currency exchanges before the
commission hits your bank, I suggest setting up a separate
Commission Junction account just for affiliations with your
'local merchants'. Be sure to set the 'functional currency'
on that account to your country's currency.

U.S. affiliates can also take advantage of drops in the U.S.
dollar by selling for foreign-based merchants. When or if
the U.S. dollar drops, you will actually get a raise on each
of those promotions.

Expand your reach by taking advantage of any and all
opportunities at home and abroad. It is the WORLD-WIDE web
after all
. Article by Rosalind Gardner, speaker, consultant and author of the best-selling "Super Affiliate Handbook: How I Made $436,797 in One Year Selling Other People's Stuff Online". To learn how you too can suceed in Internet and affiliate marketing, sign up for Rosalind's "Net Profits Today" newsletter at:
NetProfitsToday.com

Rosalind Gardner