Some providers get prices from vendors in a stable currency while selling to customers in a local currency that can be highly volatile. Their margin (or profit) in this case depends on the exchange rates between these currencies. If the exchange rate increases and prices were not updated on time, after paying vendor in the stable currency, provider gets lower profit.
By default, a provider's or reseller's account in CloudBlue Commerce has only one currency that is used both for setting prices in service plans and for billing customers. This is the sales currency that is configured on reseller initialization. Child accounts inherit this currency as their account currency and it cannot be changed.
CloudBlue Commerce allows you to use different currencies for setting up prices and for billing the customers:
- Sales currency. It is the currency in which you, as a seller, manage prices. You can add multiple sales currencies to an account and select one for each service plan. In general, it should match the currency of your contract with the service vendor.
- Customer payment currency. It is the currency in which you get money from your customers who inherit it from their parent account. Currently, child accounts can have only one currency of this type.
For margin protection, CloudBlue Commerce allows you to:
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Set up service plan prices in different currencies.
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Configure the exchange rates between sales and payment currencies. Whenever an order is placed, charges will be converted from sales to payment currency using this rate.
Who Can Use Margin Protection
For now, there are 2 main cases where this set of features can help:
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Direct. This is the main case, which utilizes margin protection features the most.
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Configuration. Marketplace prices are in a local currency; customers are also billed in that currency.
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Problem addressed. When providers pay vendors in a stable currency and sell in the local currency, they need to update prices manually, which increases operational costs.
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Reversed. This case is for the configurations opposite to the direct case.
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Configuration. To remove the need to manually update prices every time the exchange rate changes significantly, provider manages prices in the stable currency. This currency is also used as the billing currency of their customers. To issue invoices in a local currency, provider uses an external invoicing tool, which calculates the final prices using exchange rates.
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Problem addressed. If there is a need to manage prices in a different currency (for example, if a vendor changes the contract currency), provider now has to convert these prices to the stable currency before loading the prices to CloudBlue Commerce and perform another conversion to issue invoices in local currency. Such double conversion increases operational costs and adds unnecessary complexity.
Note: For CloudBlue Commerce installations that use external pricing, multi-currency can run in a limited mode to avoid interference with the external pricing. If this is your case, please contact CloudBlue Commerce support.
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