How Does Currency Conversion Work in SellerLegend?
What’s The Fuss About Exchange Rates And Why Do I Need It?
- SellerLegend can now show all your financial data in specified currencies of your choice, irrespective of the original posting currency (the currency when the goods were sold, or the financial transaction was passed)
- The new currency converter feature now also allows combining data across marketplaces with different currencies.
- Say you live in the UK. You sell on the Japanese and American marketplaces. You would like to see all your financial data in Pounds Sterling, so that you can better gauge your performance expressed in your local book-keeping currency, without embarking in mental currency conversion gymnastics.
- As an example, you can now combine your America and Japan marketplaces into one Account Group, to which you give an arbitrary group name (for example, “Combined US/Japan”).
- You then assign your desired default currency (in the example above, GBP) to the named Account Group.
- You can then select the account group by name on any screen (just like you’d do for any marketplace). The data for all the marketplaces in the group will be aggregated, and the financials will be expressed in the assigned currency of your choice.
- You can learn how to group marketplaces into account groups here.
How Does SellerLegend’s Currency Conversion Perform Its Magic?
- At this stage, you are probably asking yourself the following questions:
- Which currency conversion rate is SellerLegend using to convert your financials?
- What is the effective date of the conversion rate?
- As to the first question, the source, and specifics of the rate:
- The history of currency exchange rates that we use in SellerLegend comes from the European Central Bank (ECB) and refreshes every six hours.
- The exchange rate history goes back to the inception of the Euro on Jan 4, 1,999
- We are using the middle rate, also called the mid or mid–market rate, which is the exchange rate between a currency’s bid and ask rates.
- The middle rate is calculated using the median average of the bid and ask (offer) rates.
- As to the second question, the timing and date of the rate we use:
- We are using the historical rate at the date of the sale or incurred credit or debit
- For example, for data relating to the 7th of May 2016, we are using the conversion rate as of that specific 7th of May date.
- If the screen you are viewing shows a date range, the financials for each day in the range are converted at the particular day’s historical rate.
- For example, if a date range of 1st of May to 7 of May 2016 is selected, then we will take all transactions incurred on the 1st of May 2016 and convert those at the rate of that day, and so on for all transactions on the 2nd, 3rd, 4th, etc.
- Each day’s transactions are converted at the particular day’s exchange rate.
- It is important to understand that we are using retrospective historical rates, not today’s rate.
- The use of historical rates is essential to avoid swings in financial numbers due to the differences between today’s rate (influenced by today’s events) and the rate as it was way back then when the transaction was incurred
- You can see the historical rates we use for any currency pair in our new Foreign Exchange Rates screen.
- Currency exchange rates are for information purposes only. The rates used by Amazon or your bank for actual transactions may vary.