Ecommerce Webinar Christmas in July

Craig Agutter Edward Hardy

Ecommerce

Manager, EMEA

Corporate Market

Analyst

• Sterling is yet to find long-term stability in post-Brexit Britain

• What’s next on the FX risk horizon?

• What can you do to combat this FX uncertainty?

• Changes to Amazon FBA Fees

• Enhance your seller rankings

• Making your stock purchasing more efficient

• Conclusions

Topics

Source: ECB/World First Data

GBPJPY

GBPCNY

GBPAUD

GBPEURGBPUSD

70

75

80

85

90

95

100

105

Saturday, December 12, 2015 Sunday, January 31, 2016 Monday, March 21, 2016 Tuesday, May 10, 2016 Wednesday, June 29, 2016 Thursday, August 18, 2016

Cu

rre

ncy

Ind

ex

(re

bas

ed

at

10

0)

-8%

-6%

-4%

-2%

0%

2%

4%

70

75

80

85

90

95

100

105

110

1990 1993 1995 1998 2001 2004 2006 2009 2012 2014

Dai

ly C

han

ge in

Ind

ex (

%)

Bo

E G

BP

Ind

ex

GBP Index vs. One Day % Change

GBP Index Daily Change

UK exits the ERM

UK votes to leave

European Union

Source: Bank of England/World First Data

Global Financial

Crisis

Date Catalyst BoE GBP Index Change GBP/USD Change

24 June 2016 The UK votes to leave the European Union -6.75% -7.95%

17 September 1992 The UK crash out of the Exchange Rate Mechanism -3.04% -3.88%

01 December 2008The US economy officially enters recession and the USA loses 533,000 jobs

in one month-2.74% -3.30%

20 January 2009The 'Blue Monday' crash as Royal Bank of Scotland shares fall 67% after

announcing the largest single corporate loss in UK history-2.67% -3.82%

09 March 2009The Dow Jones Index hits 1996 lows, outpacing the losses seen after the

Great Depression-2.58% -2.79%

Source: World First Data

Used with permission from Bloomberg Finance LLP

GBPUSD GBPEUR

Note: These forecasts are the views and opinions of various investment banks and research

houses and should not be construed as advice. You should act using your own information and

judgement.

The fallout

Could lead to the end of the European Union

and trigger further referenda

Monetary

policy

Fiscal

policy

reaction

Sterling and

the euro

Source: Pew Research Center/World First Data

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Poland

Hungary

Italy

Sweden

Netherlands

Germany

Spain

UK

France

Greece

The next domino to fall? Public opinion on the European Union

Unfavourable Favourable

Source: Pew Research Center/World First Data

Poland -11

Italy -20

Germany -8

Spain -33

UK -10

France -31

30

40

50

60

70

80

90

2009 2010 2011 2012 2013 2014 2015 2016 2017

Ind

ex o

f O

pin

ion

EU favourability over time

Source: Citibank/World First

European Economic Area European Free Trade

Association

Free Trade Agreement Customs Union World Trade Organization

Norway Switzerland South Korea, Canada Turkey China, Russia

No trade or customs tariffs

Freedom of movement

No trade or customs tariffs

Freedom of movement

Limited trade and customs

tariffs

No freedom of movement

Limited tariff-free access

UK goods sellers would

have to follow EU rules

Default trade deal that would

be enacted, last updated in

1970

No freedom of movement

No input on regulations,

rules or future of relationship

Trading relationships with

Mexico, South Africa, South

Korea would no longer apply

Would contribute to

European Union budget

EU have been vocally critical

of the complexity of this

relationship, would be

reluctant to duplicate

UK domestic law would have

to mirror many EU laws in

order to maintain market

access

Trading relationships with

Mexico, South Africa, South

Korea would no longer apply

EU-Canada and EU-South

Korea model has penalized

agricultural and

manufacturing exporters

External tariffs would have to

mirror EU tariffs, limiting

trade deals made elsewhere

UK exports subject to trade

and customs tariffs, no

single market access

• Amazon looking maximise the return on its capacity in its North American FBA centres

• Amazon want to incentivise stockholding of products that will sell fast

• Storage fees for October will be reduced – encouraging you to send your Christmas

stock

• Storage fees for November & December will be increased – discouraging you sending

stock that won’t sell

• November & December increases will be complemented by reduced weight handling

fees

Changes to Amazon US FBA fees

Source: amazon.com

• Check your listings for your top selling products as well as the

most profitable products

• Consult the FBA pricing pages on Amazon to check how this will

affect you

• Remember the reduced weight fees could create an opportunity

for your business if you’re confident of selling all your stock

• Analyse how GBP:USD fluctuations will have affected the

profitability of your US Sales

Changes to Amazon US FBA fees

of consumers refuse to buy products from a company they do not trust.

of consumers choose to buy products from a company they trust and

59% will recommend those companies to a friend. 37% of consumers

are also willing to pay more to purchase from companies they trust.*

* Source:Endelman 2016 Trust Barometer. January 2016

Feedback and ratings

68%

48%

• Check your listings for your top selling products as well as the most profitable

products

• The number of reviews that you hold as a seller and on your listings is vital

• A couple of ways to manage this

• Packaging gifts

• Review communities

• Tools/companies out there to help you manage your reviews -www.ilovetoreview.co.uk

Enhance your seller rankings

• Talk to a currency expert about paying your suppliers in Far East and recent currency

fluctuations

• Use World First’s Corporate Payments solution to pay your overseas suppliers

• Avoid high payment fees

• Avoid poor exchange rates

• Pay your suppliers faster

• Greater control and transparency over your money

• https://www.worldfirst.com/uk/business/ or speak to your account manager

Paying your suppliers

• Despite political posturing on both sides of the campaign – Brexit is likely here to stay. If the Brexit effect persists, expectations of lower GBP exchange rates for longer will have to be extended.

• FX volatility is likely here to stay – central bank activity and financial market intervention likely to become more frequent

• Tools are available to help protect your fund and firm from adverse FX market fluctuations.

• Analyse your listings to ensure you are sending stock to FBA that will sell over Christmas

• Maximise your reviews to enhance your sales

• Maximise your stock buying capabilities by using World First

Conclusions

• These comments are the views and opinions of the author and should not be construed as advice. You should act using your own information and judgment.

• Whilst information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed.

• All opinions and estimates constitute the author’s own judgment as of the date of the briefing and are subject to change without notice.

• Any rates given are ‘interbank’ i.e. for amounts of £5million or more thus are not indicative of the rates offered by World First.

• World First UK Limited is our parent company, and the company through which we transact with most clients, Registered address is Millbank Tower, 21-24 Millbank, London, SW1P 4QP.

• World First UK Limited is a UK registered company - our company number is 05022388. You can look this up on the Companies House website. World First UK Limited is authorised by the Financial Conduct Authority ("FCA") as an Electronic Money Institution under the Electronic Money Regulations 2011. Our FCA Firm Reference number is 900508.

Disclaimers