Why ERC* instead of price change?
Some of our customers complain about the ERC listed in our PIs. Here is some explain and alternatives.
Since all our transaction happens in China, so all should be officially priced in RMB(CNY). Our internal accounting is based on RMB. If our cost is 3.00RMB and we quote USD price based on 10% margin, when RMB goes strong by 10%, our profit becomes 0%.
Today 1USD = 6.30CNY. 6 months ago, 1usd=6.95RMB; The drop is 10%.
From early 2018 the exchange rate drop from 6.95 to 6.50, we started to charge ERC again, as we have lost over 6.9% from the exchange changes.