Weak dollar helping some Web businesses

updated 3:32 p.m. ET Oct. 30, 2007

NEW YORK - Unlike those crinkled bucks in your wallet, the Morgan silver dollars for sale on Mike Lavanga’s Web site have surged in value since they stopped being minted in the early 20th century.

The antique American coins, with Lady Liberty’s profile on the face and an eagle on the back, are increasingly looking like good buys to foreigners, whose cash is strengthening against the dollar.

Lavanga, of Holland, Penn., said sales to buyers outside the United States have increased this year by 65 percent compared to 2006 and have doubled as a percentage of total sales on his website, www.mikescoins.com. Lavanga’s wife Karen Vincent, an attorney by trade who sells shoes and purses on eBay Inc., has also attracted more bids from places like England, France and Italy.

The economy has slowed and the dollar is weakening — not usually a winning combination for small U.S. retailers. But many of those who sell their goods online are finding that buyers from other countries are gradually making up a larger portion of sales. Exchange rates may not be a deciding factor when one buys boots, bangles or home-run baseballs, but they are certainly working to foreigners’ advantage these days.

On average, the dollar has fallen about 10 percent against the major world currencies over the last year. The euro has been hitting a series of records versus the dollar, and is now worth $1.44 — up from $1.27 a year ago and 98 cents five years ago. The British pound has also gained on the dollar to reach multi-decade highs, rising to $2.06 from $1.90 a year ago and $1.56 five years ago.

U.S. goods for people who live in places like Europe, the United Kingdom, Canada and Australia are getting cheaper. The trend, several years in the making, has been a boon to large American companies who export overseas and those with foreign operations, whose revenue is magnified once it’s converted into dollars. The Commerce Department said the U.S. trade deficit fell 2.4 percent in August to its lowest level in seven months, thanks in large part to record sales of American products abroad.

While they don’t get the same conversion benefit as multinational corporations, many small U.S. retailers have also been luring in more foreign buyers, especially for expensive items for which the exchange rate makes more of a difference.

Kai Chen sells turquoise necklaces and other jewelry online out of Dallas, and expects the business to pull in about $60,000 in revenue this year. Chen said international shipments have risen from 10 percent of total shipments last year to about 20 percent this year. And in dollar amounts, the portion of international sales is even higher, he said — foreign buyers make up more than 30 percent of revenue, because they tend toward the more expensive items, like electronic gadgets and jewelry.

Those sales have grown even with a hike in postal rates, Chen added. In spring of 2007, the United States Postal Service raised various international shipping rates by an average of 13 to 19 percent.

In Burlington, Vt., Pete Jewett runs Go Trading Post LLC with his business partner Pete Bruhn. Locals sell them their unwanted stuff so the guys can sell them at a profit on eBay.

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