An Honest Pricing Model

Otelier Eat-Work Height-Adjustable Dining Table
We have finally published our prices after months of research. Since the beginning, our vision is to sell quality designs directly to consumers. As a company that values transparency, we thought you might be interested in how we priced our products, or if nothing else, learn how one new small business navigated COVID, international trade-wars, and shifting work and lifestyles, all in its first six months of launching.

Let’s address the elephant in the room. Our tables are at the high price point for standing desks. That’s because our standing tables are in a league of their own. (We’ll prove our point in our next blog post: Standing Desk Competitive Landscape)  Most electric standing desks merely consist of an MDF or bamboo board on top of two legs. Otelier tables, on the other hand, have twice the leg power, drawers, certified sustainable wood, and fine American woodworking intended to last decades. 

Where your money is going

Below is an illustrative chart of our pricing breakdown before any discounts. As you can see, most of the price tag is going towards the cost of goods sold (COGS), followed by marketing, logistics and operations. 

Our current profit margins are very low. That’s part of our launch strategy — sacrificing profit in order to get our product into the homes of as many customers as possible and build brand recognition. Of course, in the long run we will have to cut costs and/or increase prices to be a viable business. But in the short term, consumers are basically getting benchmade furniture at the price of mass-produced furniture.

Designed and Made in America

Otelier is first and foremost a design studio, so we obviously design our own products down to the details. This contrasts with many ecommerce businesses that modify popular or classic designs, including some big name furniture companies and Amazon sellers who rely on ODM—original design manufacturer—where an overseas manufacturer designs (or copies) and produces a generic product and sellers can just put their logo on it. 

 

Our wooden tabletops are designed and made in the USA. We partner with skilled furniture makers who share our values. The FSC wood we use is finished with low VOC Greenguard options, with a solid wood frame, baltic-birch plywood skeleton and hardwood veneers. The wood joinery is mitered with reinforced tenon for extra strength to last decades, and rounded edges give a smooth touch 

Our electronic components are made by ISO-9001, ISO14001 certified manufacturers who are leaders in their industry with a client portfolio of top brands. With four legs instead of two, our tables have virtually no shaking whether in motion or static, and can lift up to 550 lbs (although warranty only covers 450 lbs).

Otelier’s products are made to last for decades, not only for the sake of customers who want heirloom furniture, but also for our upcoming circular program, where customers can resell their products on our website.  In order for our circular program to work, our products must be durable and last multiple generations of owners. Needless to say, the quality is reflected in the cost.

Byron Conn Workshop Made in America

Direct Pricing

Otelier is a direct-to-customer brand, and by customers we mean consumers, interior designers, and commercial clients. By cutting out traditional resellers and showrooms, and being online-only, we eliminate costs that do not directly benefit our end users. Given the growth of ecommerce in the past decade and especially during COVID, online D2C (direct to consumer) seems like the obvious choice for Otelier.

Below is a chart that compares how costs would be different if we went with a more traditional retail model.  For American-made fine furniture, traditional prices would have to be much higher to pay for showrooms and resellers. We would likely sell a much lower quantity, and each would be more like a collector’s item. Given our ethos for functional design that helps improve lives, we went with the D2C model that enables more customers to have access to our high quality furniture.

Traditional Retail vs. Direct to Consumer Ecommerce

Batch Production & Preorders

To fund our initial limited batch production runs, we rely on pre-orders. Once we have enough committed pre-orders, we manufacture them in batches.  This allows us to charge a much lower cost than custom furniture, but retain the high quality craftsmanship of benchmade goods. It also eliminates the need for supply chain financing, warehousing, and oversupply. We want to start small and have a close community of early supporters.  

Lowest prices everyday rather playing the discount game

Typical furniture companies have sales at least twice a year for each product category, which means consumers are over paying if they buy at any other time.  At Otelier, instead of marking up our pricing so we can have seasonal discounts, we choose to always have the lowest price possible. Customers never have to wait for a sale, or worry that they’re overpaying. 

Quality over Quantity

We love our first collection of standing tables, and hope that they will help our early supporters weather have a healthier and nicer space to work from home.  For launch, we are offering just two height-adjustable tables: the Desk and Eat-Work Table.  

Early-Bird Pre-order Discount

We’re making a one-time exception to our no-discounts policy for launch. Early-supporters of our height-adjustable tables will get a discount, which basically means they’re getting the products at cost.  Sign up for our newsletter to get $200 preorders and dibs on our first limited batch.  

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So much is going behind the scenes at Otelier. For those of you interested in design, entrepreneurship, economics, and manufacturing, we look forward to sharing our process, findings, and stories in our upcoming posts:

  • The Standing Desk Competitive Landscape
  • Ergonomic Tips for a Healthy Workspace Setup
  • COVID’s impact on the retail Industry - COVID, Int’l Trade, and Digital Advertising
  • Meet our makers

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