How exchange rates and FX fees eat margin on international orders.
Inputs
Price in foreign currency
1 unit = X USD
Stripe ~1%, PayPal 2-4%
Manufacturing cost in USD
International shipping
Results
Net margin—%
USD revenue (gross)
—
USD revenue (net of FX)
—
Profit per order
—
FX rate sensitivity
Rate Change
USD Revenue
Margin
Profit
About this calculator
International expansion looks great on a topline revenue chart and terrible on a margin chart if you don\'t plan for currency. Three forces erode international margins: exchange rate volatility (your home currency strengthening vs the customer\'s), FX conversion fees (1-3% on every order via your payment processor), and shipping cost mismatches (international shipping isn\'t 2× domestic — it\'s 3-5×).
The math is straightforward but easy to ignore until it bites you. A €45 product at EUR/USD 1.10 yields $49.50 gross USD revenue. Subtract 1% FX fee ($0.495), payment processing (2.9% + $0.30 = $1.74), $14 COGS, and $12 international shipping, and you\'re at $21.27 contribution before any marketing. If the dollar strengthens 5% (rate drops to 1.045), the same €45 yields $47.03 gross — your contribution drops to $18.80, a 12% margin hit from a 5% rate move.
The smart international pricing strategy is rate-aware. Set local prices to target a USD-equivalent contribution, monitor rates monthly, and adjust whenever the move exceeds 3-5%. Most multi-currency ecommerce platforms support automated rules but few brands set them up — they price once and forget, then discover quarterly that some markets have become unprofitable.
Watch out for hidden FX fees on the payment processor side. Stripe and Shopify Payments charge ~1% currency conversion. PayPal charges 2-4%. Adyen and Worldpay are 1-2% depending on volume. At scale, the difference between processors can be 0.5-1.5% of total international revenue. Pair this with the International Shipping Cost calculator and the VAT/GST Impact Calculator for a fuller cross-border economics picture.
Frequently asked questions
How does currency conversion affect margin?
Three ways. First, exchange rate: a $50 product priced at €45 yields different USD revenue depending on the EUR/USD rate. Second, FX fees: payment processors charge 1-3% to convert foreign currency to your home currency. Third, rate volatility: prices set last quarter at favorable rates can become unprofitable if your home currency strengthens.
What FX fees should I expect?
Stripe and Shopify Payments: ~1% currency conversion fee on top of payment processing. Adyen, Worldpay: 1-2% depending on volume. PayPal: 2-4% for foreign currency conversion (highest on the list). For brands doing significant international volume, negotiating FX rates with your processor can save 0.5-1% on every foreign order.
Should I price in local currency or always show USD?
Local currency. Customers convert 30-50% better when seeing prices in their own currency vs being asked to mentally convert from USD. Most ecommerce platforms (Shopify Markets, BigCommerce, etc.) handle multi-currency display automatically. The hard part is setting prices that hold margin across rates.
How often should I update international pricing?
Quarterly review minimum. After significant currency moves (5%+ shift in a major pair), recheck immediately. Many brands set local prices and forget — then discover 6 months later they're selling at a loss in some markets because the dollar strengthened.
Can I just price 10% higher internationally to offset FX risk?
Sometimes. Premium brands with pricing power can. Commodity-positioned brands competing with local sellers cannot — the 10% buffer makes you uncompetitive. The smart move is to monitor rates and adjust, not to set-and-forget with a buffer.