Select a pricing method
You can price your products with two methods:
- Floating pricing
- Fixed pricing
Floating pricing
With the floating method, you set a base currency, such as Euro, and a price for that base currency, such as 20€. If the product is purchased in currencies other than the base currency, the price is converted based on the current exchange rate. The price in other currencies may change daily based on the exchange rate. You, however, will always receive the same amount of money for the product regardless of what the currency and exchange rate is.
The base currency is Euro and the price is 20€. A customer in the US purchases the product for $28.37 based on the current exchange rate. The next day, the price in USD for the product is $27.56 based on that day's exchange rate, but you always receive the payment as 20€.
Considerations
- Regardless of the currency, all prices are equal relative to the base currency.
- Revenue remains stable.
- Prices may not be marketing friendly.
- If customers pay in a currency other than the base currency, the price is converted.
Fixed pricing
With the fixed method, you set a base currency, such as Euro, a price for that base currency, such as 20€, and also unique prices for one or more additional currencies. No matter what the exchange rate is relative to the base currency, the price in the other currencies doesn't change. Currencies without a fixed price will be priced according to the floating method.
The base currency is Euro and there are set prices for 20€, $25, 4,000 Japanese YEN, and 200 Chinese Yuan. Regardless of the exchange rate, the prices for these currencies will remain fixed with the price you entered for them.
Considerations
- Prices are more marketing friendly.
- Revenue fluctuates based on exchange rate.
- By using price configurations to specify who can use a particular product price based on language and location, you can market to price points in specific regions.