In this blog post, you'll learn what challenges German online retailers face when selling their products into Switzerland — and how to tap into the country's huge potential efficiently and effectively despite them.
Everyone knows the feeling: it's Saturday afternoon, it's raining outside, and there's no real reason not to spend the whole day on the couch with your favorite show, enjoying a well-earned weekend.
In theory. Except there's still the shopping list with must-haves for the upcoming vacation, and the birthday gift for your niece — for which you've been searching for the perfect idea for days. The seemingly easy fix? Browse online stores, get inspired, knock items off the to-do list one by one from the comfort of home, and listen to the rain over a hot cup of tea.
There's just one catch — the couch you want to shop from sits in an apartment in Switzerland. Why a catch, you might ask? After all, with 8.5 million inhabitants, Switzerland offers huge potential for new customers.
In this blog post, you'll learn what challenges German online retailers face when selling their products into Switzerland and what options exist for tapping into the country's huge potential efficiently and effectively despite them.
According to Germany's largest market research institute, GfK, the average purchasing power in Switzerland sits at 40,739 euros per person — three times the European average — placing it second in the ranking of European markets. The low Swiss VAT rate of just 7.7% also makes the market appealing. Compared with sales inside Germany, that boosts retailer earnings by more than 11%.
Sounds too good to be true? It is. Online shopping in Switzerland is far from as easy as it is in Germany, because Switzerland isn't part of the EU and therefore not a member of the customs union. It plays by its own rules — and those aren't always easy to figure out.
As the only country in the World Trade Organization to do so, Swiss customs calculates duties based on item weight rather than item value, which is what other trading nations use. So for every package, the gross weight has to be determined first before the items can be cleared.
Of course, Switzerland also has customs thresholds for certain quantities and order values. Customs duties only apply from five francs and up — below that, the fees are waived. The exact duty amount, as mentioned, depends on shipment weight.
To save time and headcount, companies typically have no choice but to declare their entire daily import as a single delivery to customs. As a result, the total weight of their shipments regularly exceeds the duty-free thresholds, so customs fees apply.
Those fees end up eating a big chunk of retailer margins, to the point where the time investment barely lines up profitably with their earnings.
On top of that, any company with worldwide revenue above 100,000 euros and business activity in Switzerland is required to pay taxes there. Not only does it have to be registered with all relevant Swiss authorities and submit a quarterly tax return — it also needs direct fiscal representation by a Swiss company.
That representative then handles necessary tasks like authority registration and registration with offices, tax administration, annual revenue reporting, on-site correspondence with Swiss customers and authorities, and VAT accounting. A whole stack of tax regulations to keep track of, requiring deep expertise to fulfill — it's no surprise this puts off German companies.
It's not just retailers affected by these details. Swiss end customers, who ultimately receive the packages, also feel the impact indirectly — because they end up paying for it on delivery if every detail wasn't handled upfront:
Anyone in Switzerland who likes to order online can probably tell you about unexpected surcharges that have to be paid at the door.
It makes total sense that the joy of receiving a package gets seriously dampened when delivery comes with that kind of unpleasant surprise.
No surprise, then, that customers won't buy from that shop again after such an experience and switch to a competitor instead. For online retailers, that's the worst-case outcome.
While our neighbors speak the same language as we do — at least in parts of Switzerland — German online retailers can quickly miss important regional terminology or even the correct currency formatting.
Switzerland also prefers different payment providers than Germany, and there are specific payment details to account for. Skip those nuances and your shop's credibility takes a hit, costing you valuable customers in the process.
No wonder online retailers shy away from the high effort, the costs, and the risk of losing customers. According to a Statista survey, extra costs like shipping, taxes, and fees are by far the most serious reasons for abandoning an online purchase during checkout.
That, combined with the long list of regulations and fine details to keep track of, makes the whole thing too risky for many retailers to take on.
Even online giant Amazon shies away from the many quirks of trading with Switzerland. Special customs rules, a country with its own currency, a unique tax system requiring fiscal representation, longer shipping times, and no way with current resources to offer the famous Prime next-business-day delivery or hassle-free returns — reasons enough for Amazon to barely sell or ship into Switzerland. Much to the frustration of many Swiss consumers.
For solid retailers, this is where the alarm bells start ringing — because one of the biggest competitors is voluntarily pulling out of Switzerland, leaving the lucrative Swiss market practically wide open.
So how do e-commerce companies actually conquer this market and expand into Switzerland efficiently?
Good news for German online shop operators — and especially for end customers: there are specialists like exporto. The startup, currently based in Konstanz and Kreuzlingen, specializes in trade with Switzerland and handles all required formalities for German online shops. They put their know-how to work and make these businesses profitable. So how exactly do they do it?
To get there, exporto connects digitally to its partners' online shops and processes all relevant data fully digitally and fully automatically. The company plugs into its partners' supply chains and handles packages from Konstanz with its own staff and vehicles — so packages can be dropped off in Switzerland the same day. That lets the logistics pros save customers both shipping costs and shipping time.
In addition to the German warehouse in Konstanz, exporto also operates a second warehouse in Switzerland to process returns just as quickly and easily and ship them back to Germany. So end customers face no restrictions on their return shipments either, compared to domestic orders.
Unlike margin-eating bulk customs declarations, exporto uses tightly orchestrated processes to weigh every package individually and then declare it to customs in a fully automated way. That keeps deliveries below the customs threshold most of the time — and therefore duty-free.
exporto also takes on the required fiscal representation for its customers. As a company with a registered Swiss office in Kreuzlingen, it's legally entitled to act on behalf of its customers before Swiss authorities and reliably handle every tax-related detail.
By partnering with companies like exporto, the quirks of trading with Switzerland can be turned into an advantage for retailers and end customers alike.
Where companies going it alone would fail due to limited staff and time, the right partner can help them stay profitable by bringing in the expertise and professionalism to handle the tasks that would otherwise eat into retailer margins.
And the best part — going forward, none of the parties involved has to worry whether the couch where the online shopping happens is in an apartment in Germany or Switzerland — because completely independent of that, you can listen to the rain over a hot cup of tea on a Saturday afternoon and click 'Buy now' worry-free.
Cover image by Ronnie Schmutz. Other images by Novikov Aleksey and Shutterstock.
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