Unfair currency exchange rates, hidden charges, and massive transaction fees are just another day in the life for Amazon Brazil sellers who need to send and receive payments abroad in order to run their business. And to top it all off, Amazon’s payment schedule can have you waiting weeks for your payouts, putting additional strain on your cash flow.
The good news is, making payments as a Brazil-based Amazon Seller doesn’t have to be expensive or complicated. Armed with the right cross-border strategy, you can avoid currency exchange headaches for good.
In this post, we’ll explain some of the common challenges that arise when selling cross-border from Amazon Brazil. We’ll also reveal proven tactics to help you secure fairer currency conversion fees so you can save money and invest it back into growing your business, both within Brazil and beyond its borders.
The scoop on borderless payments for Amazon Brazil sellers
- Why is it so costly to receive and send payments via Amazon Brazil?
- Tips to help Amazon Brazil sellers take control
- A solution to costly cross-border transactions
Keep more of your hard-earned sales with fair currency exchange rates. Find out how a borderless Digital Wallet can help.
Why is it so costly to receive and send payments via Amazon Brazil?
Selling on Amazon Brazil offers a huge opportunity to take advantage of the global ecommerce boom, both at home and abroad.
But trading online from Brazil can be costly.
Let’s explore some of the reasons why cash flow and expenses are more difficult to manage when running an Amazon Brazil store:
Brazil’s ecommerce industry is growing and banks aren’t keeping up
Brazil’s ecommerce market is one of the fastest growing in the entire world, making up nearly one-third of Latin America’s online selling market.
Unfortunately, banks and marketplace currency converters are yet to catch up. Many take advantage of currency fees on both sides of the transaction, and the exchange rates offered are inflated far above the mid-market rate.
For high-growth brands who both purchase inventory and sell overseas, exchanging currencies can be a long, complicated, and expensive process. If the goal is to continue to grow and scale, you’ll need to find creative and economical ways to protect your profit margins.
Currency converters inflate their rates
Take the infamous Amazon Currency Converter for Sellers (ACCS) for example.
For the chance to convert money on the ACCS platform, you’ll pay fees in a tiered-based system.
At the time of writing this, here’s how the tiers currently work:
- Tier 1: 0.75% fee for revenue equal to or over $10 million
- Tier 2: 1.00% fee for revenue equal to or over $1 million
- Tier 3: 1.25% fee for revenue equal to or over $500,000
- Tiers 4-6: 1.50% fee for revenue equal to or under $100,000
This may seem fair enough when you’re first starting out selling on Amazon Brazil. But when you reach a high volume of sales, you quickly realize just how expensive these tiers can get.
To put it into perspective, if you want to exchange $1 million, you’ll pay a whopping $10,000 in fees. Yikes.
Selling in multiple markets creates additional capital needs
It’s no secret that selling cross-border can be a great way to grow.
But with high sales velocity, comes extra inventory requirements. You’ll need additional capital to keep your best-sellers on-hand and make sure you never go ‘Amazon out-of-stock’. 😬
With many of your suppliers overseas, this also means increased cross-border purchases in multiple currencies.
But the more payments you make, the more cash you’ll leak due to those high currency transaction fees and exchange rates. With this death-by-a-thousand-cuts business model, it’s going to be even harder to get the capital you need in order to keep scaling.
Thinking about the best ways to grow your store? Check out our article on Should You Go Multichannel or Should You Go Global?
Tips to help Amazon Brazil sellers take control
#1. Use a multi-currency Digital Wallet with fair exchange rates
Before you do anything, step away from the Amazon Currency Converter. 😅
We know it’s easier said than done, but the ecommerce funding market is evolving in new and exciting ways. Today there are plenty of reliable multicurrency payment solutions that can help convert your sales in one place, minus the cash-draining fees.
At SellersFunding, we think our Digital Wallet solution is pretty great, but whether you choose us or another currency converter, you’ll want to look for a tool that has the following qualities:
- Transparency: Your currency converter should be an open book when it comes to informing you on how it calculates fees, and sharing the mid-market rate so you can make reliable comparisons.
- Fairness: From calculating fees to determining currency exchange rates, your currency converter should be grounded in fairness so you don’t lose out each time you use their services.
- Flexibility: Gone are the days when businesses traded in just one currency. Your chosen currency converter should allow you to hold and transact in multiple currencies at once.
#2. Hold cash in a reserve currency for future expenses
A quick and effective way to make cross-border payments more affordable is to have cash in a reserve currency like the US dollar.
By accumulating this cash over time from your international orders, you’ll avoid the costs of currency exchange fees.
Plus, you’ll have funds ready to complete recurring tasks like paying Chinese suppliers, finding Latin American suppliers, and funding your inventory, advertising and new product development.
#3. Make profit a priority
One of the best ways to improve cash levels in your business is to focus on launching and scaling highly profitable products.
By optimizing your profits and cash flow, you can put your brand back in the driver’s seat. With a focus on keeping your highest-margin products in stock and selling quickly, you’ll be able to:
- Increase your inventory buying capacity
- Adapt products for new markets
- Amp up your marketing and advertising campaigns
- Expand beyond Amazon Brazil
#4. Use a Daily Advance to strengthen your store’s liquidity
Let’s face it. Waiting around for Amazon payouts isn’t a great way to scale.
The good news is, you can stabilize your cash flow by getting earlier access to your payouts via a revenue advance solution like the Daily Advance.
At SellersFunding, we’ve seen multiple brands struggle to get ahead of Amazon’s rigid payout schedule. Add high conversion fees to the mix, and the gap between the number of net sales you were expecting to have and when you were expecting to have it is now bigger than you ever imagined.
As an answer to this problem, we created the Daily Advance. This fast and flexible ecommerce funding solution gives you access to up to 90% of your net daily sales at rates as low as 0.5%.
And because each Daily Advance comes with automatic access to our Digital Wallet, you’ll be able to immediately make cross-border payments using the real mid-market rate and with low, transparent transaction fees.
The Inside Scoop: How one Amazon seller increased buying power with Chinese suppliers
“My biggest hurdle is that I’m a starter brand. When I go to the suppliers, I’m not that important in their eyes.”
When Covid-19 hit, many suppliers gave priority to the biggest sellers on their rosters. For growing brand owners like Nesrine (Nessy) Hamila of fitness and wellness brand Dr. Gala, this presented a major challenge.
At SellersFunding, our team was able to help Nessy instantly increase her buying power with the help of the Digital Wallet.
“With SellersFunding, it was so easy. What a beautiful tool! In less than 24 hours, my suppliers had the money! I had to pay banks previously, Alibaba, or other companies which were transactions that cost hundreds of dollars.”
A solution to costly cross-border transactions
As you scale across borders, know that costly conversion fees do not have to be part of your business model.
With the right combination of tools, funding, and knowledge, you can say goodbye to hidden fees and regain control of your sales and cash flow.
So take action today. Find a fair and flexible digital currency tool and level up your processes to support your cross-border ambitions. Because the world of cross-border commerce isn’t going anywhere. With the right tools and strategy, you can position your brand at the forefront.
Don’t let sky-high fees and slow payouts hold your store back. Take charge with the right ecommerce solutions.
