If you run an internet trading site, one of the biggest risks if you are buying and selling in a different currency has to be the exchange rate. Even a small shift in the dollar or euro rate can lose you money if you are buying in another currency and selling in British pounds.
This is something you have to monitor on a daily basis to limit your exposure. It is also very necessary to keep a tight hold on your stock control. An item bought three months ago might end up being sold at below cost if the exchange rate has changed during that time, so the less time you keep stock the better.
Another matter to keep a close eye on is if you are lucky enough to enjoy extended payment terms, as the exchange rate could be very different by the time you come to pay for the product, even if it has already been sold.
Although it sounds pretty daunting, good financial management will alleviate many of the risks even if they cannot be eliminated altogether. Keep a watchful eye on world events and the state of the global economy which are always good indicators of future trends and shifts in the exchange rate. This is what is known as fundamental analysis.
Internet trading can be an excellent way to make money, but be sure to protect yourself and your investment.