The exchange rate, also known as the “foreign exchange market” or “exchange rate”, is the ratio of one country’s currency to another country’s currency, and is the price of one currency expressed in another currency. Generally speaking, a decline in the exchange rate of the local currency, that is, a depreciation of the local currency against foreign currencies, can promote exports and curb imports, and the pricing of export products needs to be appropriately adjusted upward. If the exchange rate of the local currency rises, that is, the value of the local currency against foreign currencies rises, it will be beneficial to imports and unfavorable to exports, and the pricing of export products needs to be appropriately adjusted downward. The appreciation and depreciation of the long-term exchange rate indicates the direction of price adjustment, while the fluctuation of the short-term exchange rate suggests that we use pricing and pricing validity period to mitigate risks.
For cross-border e-commerce companies, they have to consider the impact of trade terms on prices. Under different trade terms, cost attribution and transaction risks are different. Pricing not only needs to reflect the attribution of costs, but also needs to increase pricing for trade models that increase transaction risks. For example, the pricing of fragile products choosing FOB and DES is definitely different. In addition to increasing freight and insurance sharing, the DES price also needs to consider the sharing of losses during transportation.