Breakthrough in Switzerland

How Atout Cosmetics overcame logistics hurdles with SmartGate Flex and conquered the Swiss market

Atout Cosmetics GmbH - From traditional distribution to marketplace seller and own online shop

Atout Cosmetics GmbH imports high-quality cosmetic products from English-speaking countries and distributes them exclusively in the DACH region. Henri Bechtolf, Head of Business Development, explains: "We import various high-quality cosmetics brands from English-speaking countries and distribute them exclusively within the DACH region." The transition to online retail was an important step for the company. "At some point, we realized that we had to have a D2C channel for the cosmetics manufacturers we were working with, and this channel had to be online," says Bechtolf. This led to the creation of the online store niche-beauty.com, which was later sold to Douglas.

After the sale, Atout Cosmetics had to find new ways to market its products. Bechtolf explains: "The tendency is for few new players to come onto the market, or if they do, then only with incredibly large budgets." The company therefore relied on platforms such as Zalando in order to continue growing without enormous costs. Cooperation with large e-commerce platforms was crucial for a broader customer base and greater sales efficiency.

"We actually have to get back to the point where we generate our own sales," says Bechtolf. This led to the founding of the new D2C store very-beauty.com, which once again faced the challenges of internationalization and logistics. After the sale of niche-beauty.com, Bechtolf pushed ahead with internationalization at Douglas and used a central service provider for DDP logistics. After returning to Atout, he used this experience for the new store to achieve a "ship and forget" solution that minimizes daily overheads and delivery delays.

Why is Switzerland such an interesting market for Atout Cosmetics?

Economic advantages and purchasing power in Switzerland

Atout Cosmetics sees Switzerland as a lucrative market, primarily due to its high purchasing power. Henri Bechtolf explains the economic advantages of the Swiss market: "And secondly, we also know from niche-beauty.com times what an important market this is for our brands, as they are relatively high-priced and compared to Germany, you get significantly more sales per capita". This statement underlines how the higher purchasing power of the Swiss population makes it possible to achieve higher prices for high-quality cosmetic products, which is particularly attractive for Atout. Experience from other retailers in certain segments (e.g. swimwear and outdoor) shows that up to 50% of DE volumes can be sold in Switzerland due to the lower and more expensive local competition.

Psychological advantages through pricing

With fiscal representation, you can offer your products at regular euro prices in Switzerland, but with "Swiss VAT". This strategy helps to ensure that the products remain attractive to Swiss consumers who are used to buying in euros at lower prices."When we displayed the products with Swiss francs, we often received feedback from customers who felt that they could no longer benefit from the weak euro.

Fiscal representation leads to satisfied customers

The cooperation with Swiss Post also allowed Atout to establish fiscal representation, enabling the company to offer its products at regular euro prices but including Swiss VAT. This strategy helped to make the products more attractive to Swiss customers by adapting the pricing to the local currency while remaining tax compliant. By working with Swiss Post, Atout Cosmetics was not only able to effectively solve its logistics problems, but also successfully grow its business in the demanding Swiss market.

In this guide, we explain how fiscal representation makes your international trade easier.

What were the logistical challenges and solutions at Atout Cosmetics

Logistics requirements when exporting to Switzerland

Platforms such as Zalando stipulate a certain service level for retailers. This differs depending on the destination country. Due to the Swiss customs barrier, it is mandatory for retailers to use DDP logistics. In this way, Zalando wants to ensure that the goods reach their Swiss customers pre-cleared. Ultimately, Zalando's reputation is at stake... Other platforms such as "Galaxus" and "Manor" handle this in the same way.

Until now, Atout Cosmetics only had one shipping partner with a global network that handled all processes, including customs clearance. However, the lack of specialization in Switzerland led to high costs and administrative work. As a result, specialized logistics had to be set up, which was associated with challenges: "I had to google for quite a long time until I had the necessary background knowledge on topics such as DDP logistics or fiscal representation.

Dealing with customs and taxes

Dealing with customs and taxes correctly is crucial for success in international trade, especially when selling high-priced cosmetic products. Bechtolf explains the importance of efficient customs handling: "With your own D2C channel, you only have a chance in Switzerland if you do it well with fiscal representation... You could also do it in such a way that you continue to offer your regular euro prices in Switzerland, but fiscally compliant with Swiss VAT". This strategy helps to make Atout Cosmetics' products competitive and attractive for Swiss customers.

It also eliminates unexpected customs and VAT costs for Swiss end customers, as well as administrative hurdles such as value declarations and the like. In other words: "For our customers, shopping is as if they had ordered from a Swiss store".

Atout Cosmetics also wants to ensure fiscal compliance. Retailers with a turnover of over CHF 100,000 are obliged to register in Switzerland via a tax representative. This strategy enables Atout Cosmetics to sell its products to Swiss customers without additional customs duties, which increases the brand's appeal in a high-priced market.

Why and how does Atout Cosmetics use the DDP product SmartGate Flex via Asendia?

Why was SmartGate Flex chosen?

The decision to use SmartGate Flex was not taken lightly by Atout Cosmetics. Henri Bechtolf explains that SmartGate Flex was chosen because it offered a more efficient and integrated solution to the specific Swiss challenges of their business. From inefficient and complicated logistics arrangements to an optimized solution tailored to their needs 

Logistical advantages

The use of SmartGate Flex has brought significant logistical benefits for Atout Cosmetics. Henri Bechtolf describes how the implementation of SmartGate Flex has led to an improvement in logistics processes: "When things got off to a good start with Zalando, we then directly connected Galaxus and Manor and it was all headache-free". Why? The process involves the following steps for Atout Cosmetics' warehouse operation:

1. Pick & Pack - This is no different to national shipping. No physical invoices need to be attached to the package!
2. Labeling - There is no difference to national shipping. The Swiss Post label for the last mile is applied directly (the label call is sent from the WWS to Swiss Post via the Integrator Barcode Shipping)
3. The individual parcels are consolidated and packed in larger outer cartons.
4. The outer cartons are sent to the SmartGate Injection point in Rheinfelden (DE) by DHL Express.

The process does NOT include any operational tasks for the Atout Cosmetics admin. All export (EU) and import (CH) customs clearance processes are carried out by Swiss Post based on the data exchanged.

Simple returns management

A low returns rate of 5% indicates high product, communication and service quality. Nevertheless, Atout Cosmetics wants to process these returns as customer-friendly and efficient as possible. SmartGate Flex offers a simple solution that is fully integrated with the shipment. The process is as follows:

1. Swiss Shopper:in uses the postal label for the first mile in Switzerland.
2. Swiss Shopper:in posts the return at a Swiss Post branch and sends it to a local Swiss address.
3. Swiss Post processes the return in a Swiss returns hub and records the contents. The content data is made available to Atout on a daily basis so that they can relieve their customers even though the parcel is still in Switzerland.
4. Based on the data already provided from the outbound shipment, all customs clearance processes are carried out by Swiss Post.
5. At regular intervals, Swiss Post sends the returns to the Atout Cosmetics warehouse in outer cartons at low cost.

No further integration was necessary to benefit from SmartGate Returns. SmartGate Flex also does not involve any operational tasks for Atout Cosmetics' administration when it comes to returns.

Henri Bechtolf is positive about the effectiveness of the system: "The integration of SGF has enabled us to work more efficiently and make better use of our resources. We have been able to reduce our operating costs while increasing our delivery speed and reliability". This statement underlines how SmartGate Flex is helping to optimize Atout Cosmetics' operations by providing a reliable and consistent quality of service that is critical to the company's international business.

Technical and administrative integration process of SGF

Henri Bechtolf highlights how our integration solution via integration partner YBM has supported the company: "We had a bit of teething troubles with labeling before, as we had previously worked with another company. But that was due to our internal setup". Overcoming these initial difficulties through the IT integration of SmartGate Flex enabled more efficient data processing.

Furthermore, the Asendia and Swiss Post team provided us with a personal point of contact who helped us to get the IT and logistics up and running without any hassle. You can find out more about the integration options here.

Onboarding of the fiscal representation

The onboarding of the fiscal representative was an important step for Atout Cosmetics. Bechtolf describes the process and the associated challenges: "We have had a fiscal representative since September, on your recommendation". The implementation of fiscal representation has enabled the company to import its products into Switzerland efficiently, ensuring that all tax obligations are handled correctly. This process, especially the enabling of accounting, would be complex, but with the support of Swiss Post Consulting and the fiscal representation experts, Atout Cosmetics was able to make it successful and efficient: "Gerrit Schröder from GJS Consulting registered us within 2 weeks, installed a ZAZ account (ZAZ = customs advance account) and briefed our accounting department - all remotely."

What are Atout Cosmetics' plans for the future and how else can Swiss Post help?

Further expansion of the business in Switzerland

The interesting Swiss market offers further opportunities. In addition to the marketplace business, the new store will provide goods for Swiss customers. The store very-beauty.com will ship cosmetic products to Switzerland using SmartGate Flex in the same logistical process as the marketplace orders.

"Other platforms could be added," says Bechtolf. Atout Cosmetics is keeping an open mind here.

How can Swiss Post and Asendia support Atout Cosmetics even further?

The general cargo channel will be piloted on the last mile in the near future. The idea is to enable retailers to send small and large items or B2B shipments, which are sent on pallets, in the same physical and digital process. Bechtolf responded to this outlook with: "Collecting B2C parcels and B2B pallets via ONE interface and ONE pre-collection via SmartGate Flex would be brilliant. I know from my logistics colleagues that freight shipping for B2B consignments is anything but digitalized and therefore quite time-consuming."

Swiss Post has good know-how when it comes to marketing an optimized logistics setup from the retailer's perspective in ads and on its website. Swiss Post will provide corresponding best practice material to supportAtout Cosmetics in optimizing the very-beauty.com site.

Furthermore, Swiss Post has a business unit that focuses on data-optimized marketing in Switzerland. It may be possible to put together an appropriate marketing package for Atout Cosmetics in order to push the products to the right target group in Switzerland.