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On this episode of the Accelerate Podcast, Brad McCrory sits down to talk to Gabriel Grisham from OFX, an Australian online foreign exchange and payments company that is headquartered in Sydney, Australia.

Check out www.ofx.com online, and connect with Gabriel on LinkedIn or shoot him an email if you are a small business looking to hone in your profit margins while selling abroad.

OFX was started by 2 guys on a beach who wanted to do better international money transfers. From this, it has grown to handling over $20 billion a year with 300 people and a super efficient and great platform easily capable of handling massive volumes in a vast variety of different currencies.

OFX will work with your business to set up bank accounts for you in the local currency of the different countries you operate in called “virtual accounts”. For example, a client who has grown their US business to half a million to a million in a year and goes to marketplaces like Amazon to start their international business—these places will send your money back for you and charge 3% which quickly adds up in the margins quickly. OFX in contrast sets up this same seller with a local GDP account with whatever country currency they are in, so that they have one place to go and see balances and transfer on their time, not on the marketplaces time. In simpler terms, OFX helps companies to move their money better, faster and cheaper than marketplaces — even banks. If you can cut a couple points in the back end with moving your money, then it’s making the sale and almost everything a bit cheaper and more beneficial to you.

Banks are great at hiding the actual cost of foreign exchange and international intermittence. They’re made to make money on interest rates and spreads—instead of the ability to efficiently move money internationally across borders.

A huge missed opportunity for retailers is the ability to understand different currencies and their values with respect to one another in addition to how they change. The banks work to provide this service but they don’t do it to the benefit of the retailer. Another huge missed opportunity is not moving early enough with going global. For any seller that has a brand reaching 500k in revenue, you have to start looking internationally. It’s not easy, but it will in result lower a bit of your competition and price points may be a little different so it’s definitely something to look at earlier rather than later.

At the end of the day, treasury is not something that is fun to worry about. A lot of small companies are focused solely on product and marketing all day long and put treasury management on the back burner. However, a 2% margin savings at a million dollars is significant cash, and multiplying that year after year is money that you would be leaving on the table if you’re not looking at other solutions. It is important to set something like this up now and get your foundation set up so that you can scale when your product hits.

The Future of Mid-Market Retail

Things are going where China is now. There is so much innovation and early adoption in China, for example, mobile adoption for ecommerce is above 50%. They use their cell phones to pay for absolutely everything and WeChat is a dominant force over there while we are more diversified here when it comes to app selection. In the next 5 years we’re going to see an increase adoption of mobile commerce, like people using their cell phones for groceries. For the mid market retailer this is an exciting time!

Today’s day and age it’s probably the easiest it’s ever been to create a global brand. If you find the right product, the right message and the right market then you are golden. A 20 person shop could easily go to millions in revenue, there are so many people that are disrupting conventional supply chains.

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