Quote - It seems that  some people don't understand exchange rates and how things go when  businesses don't update their prices with the change of strength of one currency or another compared to the USd.    

Not only do we have non-mathematicians we apparently have non-readers also. If you don't get what I mean by that go back and try reading for comprehension this time.

I would be more than glad to buy from you using your brand of specious logic.

Watch closely, we'll use your logic here and your numbers for the first section. In the second section I'll be the person whining about the exchange rate and you be the merchant with flex pricing. We'll even pretend the prices a Poser merchant charges are based on the exchange rate. (Any Poser merchants out there do this for real?)

Section 1
To keep this really really simple we'll do this based on $10 USD item price so you can follow along easier but we’ll borrow ockham’s Goth Fairie Stripper Shoes for V4 as the item. Okay now that the scenario is set up let's press onward.

Using your illustration:

1 USD  = .75 GBP   therefore  10 USD = 7.5 GBP  

I pay 7.5 GBP and the bank changes that to 10 USD (We’re together so far right?)

Now the exchange rate drops to:

1 USD  = .5 GBP  therefore  10 USD = 5 GBP

I pay 5 GBP and the bank changes that to 10 USD for you.

(If you don’t see it yet you aren’t going to…ever. There is an error in presumption in your post related to your math.)

The exchange rate has fluctuated but you as a merchant are still getting the price you’ve placed on your item in your native currency, which is the value you’ve decided your labors are worth. (Note the change in what I pay as a Brit….explain precisely how I got shafted by you.)

Section 2

Now let’s take this on to the next step in the logic loop you’ve created, flex pricing. By the reasoning expounded by several of the “club” USD prices should be adjusted according to the exchange, overlooking the fact that the exchange rate is a normalizing vector for monetary exchange that functions to balance pricing between nationalities. So…for this part let’s assume I’ve moved to Australia. Checking the current exchange rates:

1 USD = 1.22 AUD  therefore  10 USD = 12.20 AUD

I pay 12.20 AUD and the bank gives you 10 USD

Still on track and you are getting the price you’ve placed on your labors in your native currency.

Now I’m going to whine and say “but that’s not fair I’m paying $12.20 for a $10.00 item.” (Completely overlooking the fact that the rate of exchange is designed to balance pricing across international borders.)

So I belabor you until you price the item compensating for the “exchange rate” and sell the 10 USD item to me for 10 AUD.

I pay 10 AUD and the bank pays you  8.22 USD

So as a merchant you are now getting 8.22 for the labor/item  you priced at 10 USD.

Do you get it yet coming from the merchant perspective?

 

 

Now, do you really think you or any of the other “club” ever need to make another snide comment at me?