As a superfood brand my company Creative Nature imports from all over the world. We ship cacao from Peru, Hemp seed from Romania, and spirulina from New Zealand to name just a few.. This requires a lot of moving parts and even more exchange rates. Because of this I’ve been hit by the weaker pound as a result of Brexit.
The biggest victim of Brexit has been the foreign exchange rate. With the pound at a 6 year low, foreign businesses, in my case farmers are reacting by increasing the cost of their products. And because there’s such volatility I can no longer do forwarding (locking in exchange rates at the current price for 6 months in advance), which is what I used to recommend.
You now have to be creative with how you import and when. Instead of doing forwarding (locking in today’s rate for future exchanges) I now do spot transactions, everyday I check the exchange rates and call my broker to lessen the spread and buy as much stock as I can with that day’s exchange. This may seem like a lot of effort but with the amount of currencies I trade in it pays to save as much as possible on exchange rates. A simpler solution is to try as much as possible to pay and get paid in sterling.
If you don’t want to deal with brokers and exchange rates you can also look to buy surplus stock of importers and even competitors (if you have a good working relationship with them), they would’ve have forwarded and still be trading at competitive prices and can pass on the savings to you.
So is Brexit all doom and gloom? Actually no. One of the best things that came as a result of Brexit and the weaker pound is how attractive UK goods became for foreign investment. It’s now cheaper than ever to do business with UK opening doors with USA & China who had long been wanting to trade with UK but couldn’t. This year I started exporting to Dubai and Scandinavia, and plan to expand more next year just because it’s so lucrative, and the government agrees spending £11million on their ‘Export is Great’ campaign as well as plans to provide tax breaks to UK business who export.
So how do you educate yourself about becoming an exporter? UKTI, UKs department for trade and Investment (now known as department of International Affairs) has a lot of help and resources: https://www.great.gov.uk/uk/