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Pricing software in EURO


#1

I’m selling a desktop SEO tool in the 50-200$USD range depending on the license.

The weak US dollar is significantly impacting my revenue (I’m based in Bulgaria and our currency is tied to the euro).

I’m contemplating pricing the tool in EUR (50-200EUR).

Pros:

  • most European SEO tool vendors price in EUR or British Pounds
  • predictable revenue per license in my currency

Cons:

  • the software would become more expensive and might turn off buyers

My revenue currently is: 1/3 USA, 1/3 Europe, 1/3 rest of the world

Anyone experimenting with pricing only in EUR and letting the current currency exchange ratios dictate the pricing in other currencies?


#2

No simple answer here. I think not showing a US$ price may make some customers in the US think it’s not aimed at them, but I would be curious as to a real world test on this.

However I do regularly purchase European software here in the US and what really annoys me more than anything is when I see a EURO price (or GBP) and a US price and when I do the exchange rate comparison I find the US is way off and higher. What I usually do is force the sales page to Euro and pay in Euro and let paypal or my credit card make the exchange. In this case the developer is still getting their EUR rate (no VAT mind).

Varying exchange rates is a cost of doing business, Apple change all the time. Maybe show a US$ price but adjust it monthly if needs be.


#3

It is really hard to make any firm conclusions about how changing the currency will affect sales. This is because it is almost impossible to test in a controlled manner AND not annoy customers who realise they’re getting charged more than other people.

Have you tried simply increasing your USD pricing 20%? This would compensate for the recent relative increase in the value of the Euro, and would save you from having to make changes to your payment processing system.

If you are worried that putting up your USD pricing will hurt sales, here’s a question: has the recent real drop in price for EUR customers led to an increase in sales for EUR customers? If not, then putting up the price a little probably won’t have much impact either.


#4

I’ve tried the following

  • Showing the prices in Euros. As @Gorby pointed people are not used to that, so they do not know if the exchange rate is 1 or 100. I see a small decrease in sales because of this uncertainty on the final price

  • Then I try pricing in euros but showing the estimated price is USD. What I think was worse. When people saw the two prices, they do not know which one was the correct one. Again, uncertainty about the final price

  • Finally, I end up localizing the site and displaying and charging people in Europe in Euros and the rest of the world in USD. To avoid having rare numbers in USD (like €87,56 for the price), I’m manually updating the price from time to time to something that makes sense. Like $100 and €90.

Sometimes I see people with a billing address in EU charged in USD. Maybe the IP does not match, VPN, Whatever.

Also, all payment processors will convert your payment to the account base currency, so unless you have a USD account in Europe (Which is not very common), you will deal with PayPal or stripe exchange rates. :confused:

As @SteveMcLeod mentioned I don’t think you will see a great increase in sales doing this.


#5

I´m dealing with a similar question… Currently our prices are in Euro, but i think that´s confusing and a turn off for people based in the US or Australia.

So i thought maybe the best solution is to keep the English Version of our app with US Dollar and just deal with the exchange rates and the fee stripe charges for the payout of dollars into Euros…


#6

We’re based in Europe and we work internally with USD prices and display all prices in USD on our website/marketing materials. Our payment processor (FastSpring) then takes care of currency conversion and showing the user their final price.

As a European user myself I’m pretty used to seeing USD prices everywhere (buying software, info products, etc) and then getting the price in EUR at checkout. I think US customers might not be that used to seeing prices in other currencies in USD.

If you don’t like the “uneven” numbers that result from currency conversion ($49.95 -> 42.22 EUR) check if your payment processor has the option to override currency conversion and set fixed prices. FastSpring has that option (so we could price our product at $29.95 for US customers and 29.95 EUR for European customers). But that feels a little dishonest and we don’t make use of that option. (Though maybe in future if exchange rates get more unfavorable a little adjustment would be needed).


#7

Hey JS,

how do you handle the “VAT” Problem selling to different european countries and the US ?
Do you use a service like octobat or taxamo or does FastSpring handle that as well ?

Thought about leaving our payment provider and switching over to stripe…


#8

FastSpring handles EU and US (for states that have such tax) VAT.