How Ukrainian design bureau ODESD2 sells furniture in EU states

Student architects Sviatoslav Zbroi and Dmytro Bulhakov opened the design bureau ODESD2 in 2012. Today, their furniture can be found not only in Ukraine – for example, in the Kyiv confectionery The Cake and the Theater in Podol – but also abroad: in a hotel in Jamaica, a techno-hub in Paris, a shopping mall in Milan. The editors of MC Today supported by the project of the EU Delegation on the Prospects and Benefits of the Free-Trade Zone of Ukraine with the EU UopenEU learned from designers how much it costs to produce furniture in Ukraine and how to export it to the EU.

 

From two chairs to armchairs for Dior

Today, the product range of the design bureau includes tables, armchairs, sofas, commodes and lamps, but it all began with a shelf and two models of a chair. The guys developed the design, found a small workshop and made the first samples. The start-up capital was about 500 dollars – just the sum that was required for the manufacture of the first production models.

“We had a classical architectural education, so there was no understanding that after the sketch there should be technical documentation of a certain kind and many other things. This is a whole process,” Sviatoslav recalls.

In autumn 2012, the design bureau was the winner of the contest Ukrainian Design: The Very Best Of. The guys were offered to exhibit their samples at the M17 Contemporary Art Center in Kyiv at the awarding ceremony: it was for the first time that real people sat on the armchairs of ODESD2. The results of the contest were written by the local profile mass media, and the design bureau was recognized on the Ukrainian market.

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ODESD2 furniture in the Kyiv show room

A foreign market knew about the Ukrainian design bureau also from publications in mass media, and also thanks to the appearance at special aggregation platforms such as Behance, Archiproducts and Architonic, where designers from all over the world exhibit their projects. At one of them last year, a representative of Dior responsible for the selection of furniture for the Paris store DIOR Perfume, drew attention to the products of ODESD2.

Now, there are several ODESD2 chairs in the store in Paris worth EUR 5 thousand, but more coming soon.

Europeans often first take a small batch as a sample, and then order more.

 

How much it costs to make a chair

Any piece of furniture begins with a draft design that can look like a pencil sketch, a layout, a 3D model or a real prototype. Then, the project’s consistency in terms of such parameters as idea, appearance, manufacturability and cost is evaluated. Additionally, the market is analyzed for whether there are similar products and how much they cost.

If they decide to develop the project, they draw up technical documentation for production, because the sketch is just a picture, then it is necessary to decide what materials to use, how to process them, and so on. Prototypes are made until the model that will become the basis for production is fully approved.

Now, the guys make 3 to 4 prototypes on average. It may take 2 to 8 months starting from the launch of the first prototype and till the presentation of a new product on the website.

According to Sviatoslav, the cost of developing one product on average varies from UAH 60 thousand to UAH 250-300 thousand. However, if many prototypes are required or complex matrices are needed – the templates for serial production of the unit are so called – the cost may grow up to UAH 500,000.

 

From order to delivery

The standard procedure for working on an order consists of three stages: coordination of colour and material, issuance of a commercial offer and selection of optimal delivery terms. Usually, dealers are involved in the first two. As of today, the trade network ODESD2 has authorized 17 dealers from Ukraine, France, Germany, the USA and the UAE.

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ODESD2 furniture in the Kyiv show room

Each dealer has 24 hours to contact the customer and specify the details of the order. If it is about a product made of standard materials, the production time will be 28 to 35 days. If non-standard materials are needed, for example, fabrics that need to be ordered additionally and which delivery to Ukraine will take 14 days, then the time for production increases.

Delivery is conducted by partnership logistics companies. In Ukraine, orders are delivered quickly – up to 2 days. In the EU states, orders are sent by a vehicle and the delivery time is 5 to 7 days.

 

Entering the EU market

Entering the European market by ODESD2 coincided with the revolutionary events in Ukraine. “Any negotiations then began with the words: “You have military operations there.” We had to explain that everything is not so scary here, we are shipping from Kyiv,” Sviatoslav tells.

One of the first orders that the guys sent to Europe was a set of dining furniture for a private client from Amsterdam in 2015. The Netherlander learned about ODESD2 from mass media: saw product samples there and decided to order.

The peculiarity of Western European buyers, say the designers, is that they are much more peaceful buying furniture in the picture. While Ukrainians prepare for purchase for a long time, they choose with their whole family and sit on an armchair or sofa in turn before buying them.

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V1 chairs by ODESD2 can be found in the Paris techno-hub Les Dunes. The same chairs and in the DIOR Perfume store

The next large order came in 2016 from the techno-hub Les Dunes in the suburbs of Paris. The designers have never found out how the customers knew their contacts: either through publications in French profile publishing houses, or through advertising on social media.

“A customer representative just e-mailed one of our dealers with a specific request for a large number of chairs,” the designers say. 72 chairs were delivered to Les Dunes with a total cost of EUR 52,400, and later the French additionally ordered about 15 more.

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V1 chairs by ODESD2 in the City Life Shopping Mall in Milan

The works of the design bureau can be found in the shopping and entertainment center City Life in Milan: in one of the restaurant areas of the shopping center, there are 16 V1 chairs, which have the real queue as of today. The cost of the contract was EUR 23,400. In 2017, the guys participated into the tender due to the fact that their products were seen by a project architect at one of the aggregation platforms.

 

Peculiarities of trade with the EU

The cost of a significant part of the design bureau contracts exceeds EUR 6 thousand. In order to import the goods indicated in them into the EU without duties, the EUR.1 certificate is required. It proves the origin of the goods from Ukraine.

When in 2016 the procedure for issuing certificates changed – they were issued by another agency – a professional broker was attracted in the design bureau for their registration. “He immediately sent us a specific list of required documents: invoice, contracts with suppliers, technological process of production and so on”, Sviatoslav tells about the details.

Sometimes Europeans do not even know about the advantage of duty-free import, which provides the EUR.1 certificate. According to the bureau team, they often tell customers about the existence of such a pleasant bonus.

Most of the difficulties are related to logistics. For example, the guys had a large supply to Paris – a private order. The vehicle reached a certain point in the French capital city, but its further passing was prohibited. It turned out that the dimensions of the vehicle were literally by some centimeters more than those with which you are allowed entering the city center. This was not taken into account either at the design bureau or at the logistics company. As a result, by some miracle, the driver managed to find the cart and manually delivered the goods to the customer.

“We imagined six Ukrainian furniture items in a very colourful manner rolling on carts in the center of Paris,” Sviatoslav now jokes.

Another difficulty is complex contracts: “We very often receive a request for the same piece of furniture from several parties: there is a customer, an architect and a purchasing company. Misunderstandings begin when three parties apply at once and each has its own interest,” Sviatoslav says.

In such situations, the guys openly negotiate with everyone, but the final decision is always left to be made by the customer. It is the customer which decides who the order is assigned to, and all parties are then subject to notification of it.

 

Prospects of Ukrainian products in the EU

Entering the European market by ODESD2 roughly coincided with the signing of the EU-Ukraine Deep and Comprehensive Free Trade Area Agreement, which made it possible to export goods without import duties. Actually, that’s why the guys did not feel any difficulties.

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ODESD2 furniture in the Kyiv show room

Now ODESD2 sells roughly the same quantity of its products in Ukraine and abroad, but there is a clear tendency to an increase in export. The plans for the bureau are to strengthen the presence on international aggregation platforms, like Archiproducts and Architonic, since the audience of these portals is architects and designers who work on complex interior projects. The platforms allow them quickly selecting the top positions by category and offer them to their customers.

In addition, soon products by ODESD2 can be found in Germany and France – by the end of 2018, the guys plan to open their own official stores there; now they are negotiating about the premises and terms of cooperation.

Sviatoslav is confident that Ukrainian products have excellent prospects in the EU.

We have a lot of really good manufacturers.

“Everything you need to work on,” Sviatoslav believes, “is that there are more offers from Ukraine, then the Europeans will be able to choose us.”

The original article is published on MC Today

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