Why apparent margins and real margins often diverge
Many Swiss SMEs grow by selling products or services under their own brand, but sourced from an external supplier. White-label and private label models make it possible to enter the market without heavy industrial investment, but they hide costs that do not appear in the purchase price: custom packaging, shipping, returns, marketing, customer support, contractual penalties and volume discounts.
In Switzerland, ordinary accounting and the Value Added Tax Act (VAT Act) require a clear distinction between revenue, direct costs and ancillary expenses. A 40% gross margin on the list price can turn into a 12% operating margin if every item that erodes profitability is not tracked. For entrepreneurs, self-employed professionals with commercial activities and fiduciary firms assisting reseller clients, the challenge is twofold: measure performance correctly and document supplier agreements in an auditable way.
This guide explains the differences between white-label and private label, how to calculate true margins in the Swiss tax context, which VAT aspects to consider and how to record contracts, advance payments, discounts and obligations towards suppliers in the accounts. Legal references are based on federal law in force as of 2026; for specific cases, cantonal provisions and the contract signed with the partner remain decisive.
White-label, private label and pure reselling: what changes
Before setting up accounts and VAT records, it is essential to understand which commercial model applies. The distinction affects who bears inventory risk, intellectual property rights and how the economic flow is presented in the financial statements.
| Aspect | White-label | Private label | Reselling (reseller) |
|---|---|---|---|
| Brand on sale | Reseller's brand, supplier's standard product | Reseller's brand, customised or exclusive product | Original manufacturer's or distributor's brand |
| Customisation | Label, packaging, documentation — minimal | Formula, packaging, dedicated SKU variants | Supplier catalogue, without exclusivity |
| Inventory risk | Generally borne by the reseller | Borne by the reseller; often higher MOQs | Variable: own stock or dropshipping |
| Typical contract | Supply contract + brand licence | Contract manufacturing (OEM) or dedicated supply contract | Distribution or agency contract |
| Revenue recognition | Own sale to end customer (buy-sell model) | Own sale; capitalisable SKU development costs where relevant | Buy-sell, or commission if acting as agent without stock risk |
| Target margin | Medium-high; depends on brand and service value added | Higher, but fixed setup costs and MOQs | Lower; price competition |
In the buy-sell model — the most common among SMEs — the company purchases goods or services from the supplier and resells them independently. Revenue is recorded at the gross selling price and the cost of goods sold (COGS) net of discounts received. If instead the company acts as an agent without assuming ownership risk, the remuneration is recorded as commission income, with a different impact on VAT and margins.
Calculating the true margin: from formula to operational data
The list gross margin is only the starting point. Sound decisions require at least three levels of analysis, ideally by SKU or product line.
Commercial gross margin
Basic formula: (net selling price after discounts − net purchase cost after supplier discounts) ÷ net selling price. Purchase cost includes invoice price, inbound freight, customs duties if importing and non-recoverable clearance costs.
Example: sale at CHF 100, purchase CHF 55, customer discount 5%, supplier discount 3%. Net revenue CHF 95; net cost CHF 53.35. Gross margin ≈ 43.8%, not 45%.
Contribution margin
Deduct variable selling costs: branded packaging, outbound shipping, marketplace commissions, payment fees, accepted returns, replacement warranty. Useful for assessing whether a channel (e-commerce, resellers, B2B) is sustainable.
If variable costs absorb 18% of revenue, the contribution margin in the case above drops to approximately 25.8%.
Operating margin by line
Includes a share of fixed costs: marketing, dedicated staff, software licences, sampling, certifications, depreciation of packaging equipment. Essential for pricing and negotiating with the supplier.
With fixed costs allocated at 13% of revenue, the operating margin drops to approximately 12.8% — a figure that must cover overheads and profit.
KPIs to monitor monthly
- Return rate and average cost per processed return
- Stock turnover (days inventory outstanding)
- Average effective discount vs maximum contractual discount
- Obsolescence and write-down incidence
- Break-even per SKU after variable costs
Accountex lets you link products, suppliers and cost centres: set up each SKU with its reference supplier, track retrospective discounts (rebates) and generate reports by product line. The aim is to prevent "catalogue" margins from ending up in the income statement without the costs that erode them in operational reality.
Swiss VAT: purchases, sales and special cases for resellers
Businesses with worldwide turnover from taxable and exempt supplies of CHF 100,000 or more must register for VAT. Registered resellers charge tax on sales in Switzerland and deduct input tax on attributable purchases, subject to exceptions.
Domestic sales (Switzerland): standard rate 8.1% on goods and services (reduced rate 2.6% for food, medicines, books and newspapers; 3.8% for accommodation). The B2C price includes VAT; in B2B, VAT is invoiced separately if both parties are registered.
Purchases from Swiss supplier: invoice with deductible input tax if the purchase is attributable to the business. Verify that the supplier correctly states the VAT number and rate. Discounts and credit notes must be recorded in the relevant period.
Imports from abroad: import VAT is paid at customs (or via a deferred payment procedure if authorised by the FTA). The amount is deductible as input tax, provided the goods are used for taxable transactions. Duties and non-VAT expenses are not deductible as VAT but form part of the purchase cost.
Services from foreign supplier (services, software, marketing): if the supplier has no presence in Switzerland, the reverse charge mechanism may apply: the registered Swiss recipient self-declares VAT on both debit and credit sides, where the conditions under the VAT Act are met. Document every foreign invoice with the correct VAT code.
Exports: deliveries abroad may be exempt from Swiss VAT if documented (proof of export, customs documents). The foreign supplier does not charge Swiss VAT; note VAT in the destination country if stock is warehoused abroad.
| Transaction | Typical VAT treatment | Accounting note |
|---|---|---|
| Goods purchase CH → resale CH | 8.1% deductible input tax on purchase; 8.1% on sale | COGS net of VAT; revenue gross excluding VAT |
| EU import → stock in CH warehouse | Import VAT + deduction if attributable | Duty in cost of goods; VAT in tax account |
| Marketing service from DE agency | Reverse charge if taxable B2B supply | Self-assessed VAT in periodic return |
| Retrospective supplier discount (rebate) | Adjust input tax if originally deducted | Supplier credit note reduces COGS or cost |
| Customer return with refund | Reverse sales revenue and VAT in return period | Stock re-entry or write-off with possible impairment |
The effective method (standard for most registered SMEs) requires orderly VAT records by period. Avoid confusing cash receipts and revenue: VAT is generally settled on an agreed consideration basis (invoiced) or, with FTA authorisation, on a received consideration basis (cash received). The choice of accounting method affects management of receivables and returns.
Accounting for supplier agreements: items, entries and traceability
White-label and private label agreements often contain clauses that affect the balance sheet and income statement: advance payments, deposits, MOQs, penalties, licence fees, minimum purchase obligations and target discounts. Orderly accounting facilitates audit, due diligence and future negotiations.
Purchase and stock recognition
On goods receipt: debit goods / warehouse account, credit supplier (and VAT account if applicable). On sale: debit COGS, credit warehouse at average cost, FIFO or specific identification — consistently with the valuation policy adopted (Art. 960a and 960c CO and accounting principles).
Ancillary costs (freight-in, transport insurance, labelling) must be capitalised in inventory cost until the point of sale, not immediately to the income statement.
Advance payments and deposits to supplier
Advance payment for private label production: record on a transitory asset account (advances to suppliers). On delivery, reclassify to warehouse or fixed assets if dedicated equipment. Do not recognise COGS before the actual sale of the goods.
If the advance covers exclusive reusable packaging development, assess whether it meets capitalisation criteria (useful life, cost identifiability) under internal accounting policy.
Discounts, rebates and volume bonuses
Invoice discount: directly reduces purchase cost. Annual rebate conditional on turnover: estimate at period end if probable and reliable (accrual), or record on receipt of the credit note. Consistency between estimate and actual outcome avoids artificial profit fluctuations.
Supplier-funded co-op marketing: if it offsets promotional costs already incurred, it may reduce marketing costs; if it exceeds documented costs, the excess must be analysed (possible ancillary income).
Brand licences and minimum purchase commitments
Periodic white-label licence fee: record as expense in the relevant period (licence / services account). Minimum purchase obligation not met with penalty: accrue the estimated penalty if non-achievement is probable before the contractual deadline.
Obsolete stock due to end of product life or formula change: write down to net realisable value (Art. 960c CO). Document the decision and its link to supplier communications.
Numerical example: private label cosmetics in a Ticino Sagl
A Sagl based in Ticino sells a private label cosmetics line online, produced by an Italian supplier. Annual turnover CHF 480,000; goods purchases CHF 210,000; estimated rebate 4% at year-end; outbound shipping CHF 36,000; returns 3% of turnover; marketing CHF 42,000; packaging licence CHF 6,000.
| Item | Amount CHF | Comment |
|---|---|---|
| Net sales revenue | 480'000 | Excluding VAT |
| COGS (purchases − estimated rebate) | 201'600 | 210'000 − 8'400 rebate |
| Gross margin | 278'400 | 58.0% of revenue |
| Shipping and net returns | −50'400 | 36'000 + returns reversal 14'400 |
| Marketing and licence | −48'000 | 42'000 + 6'000 |
| Contribution margin | 180'000 | 37.5% — useful figure for pricing |
Without the estimated rebate and return costs, the apparent gross margin would be 56.3%. The difference of almost 19 percentage points on the contribution margin shows why supplier contracts must be translated into recurring accounting entries, not merely filed in the contracts folder.
Operational checklist for entrepreneurs and fiduciaries
- ✓Verify in the contract whether the relationship is buy-sell, commission or agency without assumption of ownership risk
- ✓Map each SKU to the supplier, MOQ and price review date
- ✓Separate in accounting VAT on imports, reverse charge and domestic sales
- ✓Record rebates and target discounts with uniform accrual criteria
- ✓Take stock inventory at year-end; write down slow movers and expiry dates
- ✓Document brand rights and exit clauses (residual stock, penalties)
- ✓Reconcile supplier statements quarterly with orders, deliveries and credit notes
- ✓Analyse margin by channel (D2C, wholesale, marketplace) at least quarterly
- ✓Align returns and warranty policy with what was negotiated with the manufacturer
- ✓Retain contracts, packaging BOMs and export proof for VAT audit and review
Conclusion: sustainable margins start with clear data and contracts
White-label and private label reselling is a growth accelerator for many Swiss SMEs, but profitability is determined in the details: late discounts, returns, logistics, purchase obligations and VAT treatment across cross-border supply chains. Calculating true margins by SKU and channel, and accounting for every element of the supplier contract in the right period, avoids surprises at year-end closing and strengthens the negotiating position with partners and banks.
With Accountex you can link purchases, sales and cost centres in a single flow: products by supplier, compliant VAT recording, margin reports and document traceability for your fiduciary. Investing time in accounting structure today means more solid pricing, more predictable liquidity and compliance with the VAT Act and the Code of Obligations tomorrow.