HOW VEGAS COSMETICS FOUND THE PERFECT PARTNER FOR INTERNATIONAL GROWTH
When an entrepreneurial startup joined DHL Parcel Connect’s European expertise, the results transformed an exciting venture into an international online B2C success.
E-commerce startups often encounter a problem. To grow, they need to offer customers a high-quality product at a good price that includes shipping costs, leaving them enough room to reinvest. However, because they are embryonic, their customer base is generally lower than that of merchants already present in the market, which makes it difficult to obtain the same volumes. Without volume, they can’t get favorable shipping costs. And without favorable shipping costs, they can’t get the volume. It's a paradox.
This was the situation faced by the German Luso company, Vegas Cosmetics. The company was born in 2003 when two entrepreneurs, Nelson da Costa and Carlos Fernandes, decided, like many entrepreneurs, to build it themselves. They started with a line of 50 perfumes and cosmetics and within a few months registered the company, designed the brand image, created the website and printed the labels.
Instead of a traditional sales process, they invested in training and assisting an ever-growing team of local partners; resellers who market the products within their own customer networks. The challenge of this business model is that growth tends to be organic. Rather than looking for new markets and establishing detailed strategies to capture market share, the business expands through word-of-mouth advertising. As more partners in new countries joined the team, sales grew exponentially but reactively.
Vegas Cosmetics initially sold in the Portuguese and German markets, but as the news spread, opportunities to enter new international territories emerged. Italy was the next logical step, but there was a problem. Although they had a small number of highly motivated partners in the country, the cost of shipping small volumes from their distribution center in Portugal was hindering. Vegas Cosmetics CEO Nelson explains what happened next:
Back to the starting point... Without volume, you can’t get the best price. Without the best price, you can’t get the volume. Finally, Nelson contacted José Santos from DHL eCommerce in Portugal and Vegas Cosmetics’ luck began to change. Because something magical happens when people with an entrepreneurial vision meet. Instead of looking at all obstacles, they start looking at opportunities. And DHL, despite its 50-year history, has always been entrepreneurial at its core. Nelson adds: "In 2017, I presented our problem at a meeting with DHL and said, "this is what I need, what do you have to be able to grow together?" And Jose had the ability to see the potential and give us the conditions we needed. You need a contact at the company [de transporte] that has the same vision, understands the needs, and says: "OK, I’m going to be your partner on this project".
After the meeting, Jose spoke with his colleagues at DHL eCommerce to see the possibility of working with Nelson through the DHL Parcel Connect service. In those early days, Vegas Cosmetics primarily needed to ship perfumes. No overnight shipments were required; delivery within three business days was sufficient for all stakeholders. This meant that orders could be transported by road instead of air, reducing unit cost and providing Vegas Cosmetics partners with a viable cost of "disembarkation".
DHL has given us the opportunity. If we had to pay a lot of shipping costs or wait two weeks for the order, I would lose the customer," told us about Nelson. "Jose realized that under the conditions [certas], we would grow and create the numbers. {"error": {"code": 400,"reason": "invalidJson","message": "Error parsing JSON: JSON parse error: Missing a comma or '}' after an object member. (offset 129)\n. Expected JSON schema: \n {\n "text": = [string]\n }\n"}}
DHL’s trust in Vegas Cosmetics has been rewarded. The company continues to grow, now with profitable markets in Italy, Spain, Switzerland, Austria and Luxembourg. This balance of speed and price was the key to the company’s success and DHL eCommerce was able to find the ideal point for everyone to be satisfied. But as Vegas Cosmetics expanded its business across Europe, a new shipping dynamic grew in importance: last-mile service [last-mile]. And here, DHL Parcel Connect had the edge again.
DHL Parcel Connect’s wide range of last mile delivery options, from scheduled and alternate delivery addresses, to lockers/lockers and delivery points, mean Vegas Cosmetics partners can often receive an alternative delivery option that fits their lifestyle. This is important because each partner is a valuable investment for the company.
Today, Vegas Cosmetics offers more than 500 products, including health supplements, jewelry, home fragrances and cleaning solutions, and a home décor line that will be unveiled soon. Customers love quality, the partner team is constantly growing and Nelson is already considering ventures in Eastern Europe and South America. {"error": {"code": 400,"reason": "invalidJson","message": "Error parsing JSON: JSON parse error: Missing a comma or '}' after an object member. (offset 46)\n. Expected JSON schema: \n {\n "text": = [string]\n }\n"}}", and now it looks like the only way is to grow. But everything could have been very different...
Without the team’s effort behind DHL Parcel Connect to find a solution that worked for everyone, Vegas Cosmetics could have struggled to develop their international markets. Sometimes it takes a partner who sees the way forward with the same clarity, understands the importance of trust and vision in creating business growth, and empowers the company to take the next step toward international sales.
If you are now at this crossroads, why not talk to the team DHL Parcel Connect today? {"error": {"code": 400,"reason": "invalidJson","message": "Error parsing JSON: JSON parse error: Missing a comma or '}' after an object member. (offset 22)\n. Expected JSON schema: \n {\n "text": = [string]\n }\n"}}", {"error": {"code": 400,"reason": "invalidJson","message": "Error parsing JSON: JSON parse error: Missing a comma or '}' after an object member. (offset 18)\n. Expected JSON schema: \n {\n "text": = [string]\n }\n"}} And that can be exactly what you need.
