On November 1st 2007 the Canadian dollar hit a new all time high against the US dollar - coming in at 1.0592 US dollars. You’ve probably also heard that the US dollar is at historic lows versus many other major currencies - most notably the British Pound, the Euro, and the Australian dollar.

From an e-commerce perspective, the low dollar presents an unprecedented opportunity for online merchants to venture into the international marketplace. US based sellers can offer a significant price advantage - often totaling more than 40% - over the local choices available to shoppers in Canada, the UK and most of Europe. This price advantage is maintained even when taking into account any extra shipping costs, taxes, duties, etc. a cross border sale may entail.

Why is the dollar falling relative to these currencies? The answer is simple supply and demand.

Demand for US dollars has been decreasing steadily for the past few years, primarily due to low interest rates in the US. As US rates fell, investors chose to put their money in higher yielding securities in other countries. This had the effect of decreasing demand for US dollars while simultaneously increasing demand for other currencies.

While there is disagreement among economists as to other factors that may be driving the dollar lower (inflation fears, uncertainty about the US economy, the Iraq war), most agree there is no reason to suspect this trend will reverse itself anytime within the next few years.

The impact on the US consumer has been subtle. Certain imports (e.g. European cars and luxury goods) have clearly gone up in price. The lower dollar is one of the reasons for the recent run up in the price of imported oil. However many of the day to day items we use come in from countries that have pegged the value of their currency to the US dollar (e.g. China, Latin America) thus mitigating many of the inflationary effects we would expect from higher import prices.

While there are some challenges to expanding internationally, gaining access to more than 500 million highly qualified shoppers makes it well worth the effort. Several organizations (including 2Checkout and E4X) offer a range of services to make the process easier, more cost effective, and much faster to deploy. The key to success is to focus on making international shoppers feel welcome and making it easy for them to buy your products.

While the relative value of currencies may vary over time, the size and breadth of the US market offers a huge range of products and services of substantial interest to international consumers. The weak dollar makes this an excellent time to consider extending your sales and marketing efforts beyond the US borders. At some point in the future the dollar probably will strengthen again, but by that time you’ll have built a base of loyal and valuable international customers.

Michael DeSimone is the Chief Executive Officer of E4X, Inc.