Are you aware of the impact the weakening US dollar is making in your business? 

Just about all of us use and/or sell overseas products in our daily business operations.  Because of the weakening US dollar, these overseas products may be costing us more than we realize.  For many business owners, the weak dollar has the potential to destroy profit margins and cripple their ability to operate.

What to do...what to do...

What can you do to help ensure the weak dollar doesn't weaken your business?  Plan. 

An Example:

An example of great planning is reflected in the work of Eric Paulson, the owner of Dragon Gardens, a direct importer and wholesaler of commercial pottery. 

Foreseeing global cost changes from many different potential sources, Eric planned ahead to make sure he was going to be alright.  And he is. He’s very alright.

What he did…

Early bird:

Eric secured the vast majority of his oversees inventory for this spring and early summer last August.  Meanwhile, Eric's buyers also made their initial orders from him, which he set pricing for ahead of time.

This was a great move on his part.  This winter, the US dollar lost significant value against the currency of the countries that make Eric’s pottery (a nearly 30% increase in the cost of product acquisition since he purchased last August!).  Had Eric not bought and sold ahead of time, he'd be saying goodbye to 30% of the profit he is now making.

Sometimes, relationships come with numbers:

Eric developed strong relationships with his supplying factories.  One way he did that was to become a major revenue source for them by partnering with like companies to make larger joint purchases. He is now the single largest buyer for several China based factories. 

This has allowed Eric to secure set pricing based on time of ordering, not time of production and delivery. Additionally, he has secured warehouse ability in China with generous terms on inventory control, giving him the ability to order significant inventory at dramatically reduced pricing.

Be Inspired

Because Eric planned ahead, he has a significant competitive advantage going into 2008.  While his competitors take significant profit hits on their inventory or are forced to renege on promised pricing, Eric is moving far more inventory at far higher profit margins.

As you look at your products and business processes, don’t ignore the impact the weakened US dollar may have on your business.  Instead, take a good look and plan around it.  This year, it could make all the difference.