In order to better understand where we're coming from regarding tariffs and pricing, it's important to know a bit about us.

Inovelli Team

As shown on, "The Team" page, there are 5 of us here. That's right, we are not some huge company that has pricing strategists, logistics wizards, nor supply chain economists working for us. We've navigated the business world for the past 8 years and have been through a lot of ups and downs, trying our best to stay afloat and offer the best products we could.

Our Strategy

When we first started, our strategy was to compete on pricing as we believed at the time that price drove sales. If no one knew who we were, why would they pay a higher price for our products?

This is why we originally chose to source from China as it was not feasible to look elsewhere.

The strategy shifted back in 2018-2019 when tariffs first hit to move to a more premium model where we focused on positioning ourselves as a more premium brand, offering better quality products with more features. This allowed us some breathing room from a margin perspective. Still, in order to offer a premium product, we had to source from China as there was just not an alternative.

Luckily (I guess TBD) this shift in perspective has helped us as the higher margins allowed for more innovation and kept us afloat during times of being out of stock during COVID.

But, at the end of the day, we still were sourcing from China and again, there just wasn't a ton of options as even if there was a viable option, it still would cost $500k to $1M to move (and we'd have to increase costs again due to the higher price per unit).

The Argument For Non-Chinese Goods

The biggest argument we hear is, "well, if you didn't source from China, this wouldn't be an issue". At a high level, maybe, but who knows. Would people want to pay $100 for a light switch? Our research has shown that the majority of people don't necessarily care where the product is manufactured, they just want a product that is priced fairly and offers them value.

I'm not here to argue over whether or not there are price/market manipulation strategies as that's way above my paygrade. What I am here to say is that anecdotally, it's not an option for us to move outside of China as they offered the best pricing and have some of the brightest engineers I've ever worked with. The products they produce for us have won awards and they've helped us sell hundreds of thousands of units across North America and I'm proud of what we've worked together on.

So it came down to whether or not we believed people would pay $100+ for a switch and whether or not we could afford to move. To us, the risk did not outweigh the reward.

Where Do We Go From Here?

That's an excellent question. The humble answer is, "I don't particularly know and I'm trying my best to balance what I think is fair for our customers and at the same time trying to make sure we don't go out of business".

We've been through much worse, had darker times and I'm confident we'll get through this, but there may be some temporary pain until things stabilize.

So, my plan as of today (April 9th), is to increase prices so that we can help cover the incoming shipments (for clarity, this does not mean we are requesting additional payment on orders already made, this just means any new orders will increase) and if the tariffs decrease, we will re-evaluate where we are from a cash-flow perspective.

I want to thank everyone in advance for your support and I hope that this is temporary.

Eric

Founder | Inovelli

This is an excellent question and one that we've explored. To put it simply, there are a few reasons.

The first is that we'd have to start over completely with our products. While we do own the tooling, the manufacturer is not going to simply hand it over. Unfortunately, that's not how business works, especially when you're a small company and there's zero incentive for the manufacturer to do so if they know they're going to lose their business.

To start over would cost an estimated $50,000 per SKU (initial costs would be higher, but we share some of the same tooling across SKU's, so this is an average). This includes an estimate for having to recertify via UL/ETL, etc as I'm not entirely sure how that works since part of the certification requires the manufacturing facility to be inspected.

Net estimated costs to transfer over our products = $500,000-$750,000.

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The second is obviously the labor costs the factory incurs that would create a higher per unit cost to us.

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The final reason is simply because most of the raw materials (especially the smart components) still come from China, so while we may save some on the "final assembly", it still does not benefit us to try to manufacturer outside of China.

The short answer is yes, they will be tariffed as they haven't shipped to us yet, but we do not have any intentions to pass that cost on.

In other words, if you've bought a pre-order, we will incur the costs ourselves.

Not ideal, but this is the risk we take with pre-orders. There's nothing quite like budgeting for a $250,000 order and in the blink of an eye, that now costs $500,000!

Over the next couple of days (for reference this was written on April 9, 2025), I will have to crunch some numbers to see where we're at and adjust the prices accordingly.

There are many arguments to be made that existing inventory should not include the tariff costs and "corporations are greedy", but here's where we're coming from, agree with it or not:

While yes, it does seem unfair that current inventory prices should remain the same, what we have to account for is the additional doubling of the costs of inventory that is enroute. The tariffs are not charged until the goods are processed at the port and if you were budgeting x amount to pay and that has now doubled, you have to prepare in advance for that.

Let me explain:

• The profits made on products go to a few different things: inventory, overhead and R&D
• For us, it mainly goes to inventory and R&D as we've kept a lean team
• Even with a lean team, when your business is growing 80-100% year over year, there's still only so much you can do to keep your cash-flow managed as essentially all profits go to new inventory (so we can stay in stock)
• Now, imagine if you're running on thin cash-flow month over month due to large orders that were placed, and your commitments to inventory costs double overnight -- how do you pay for those additional costs? You can't just not pay them otherwise your inventory will not arrive.

The only way is to charge a higher price on your current inventory to account for the higher amount you're going to have to pay on your new inventory that's coming in. Now, normally, a 20-30% increase would be ok to cover costs as luckily we have healthy margins, but when the price doubles, covering it is not possible.

NET: We will have to raise our prices on current inventory to account for incoming inventory.

Excellent question. As of right now, we plan on adjusting prices accordingly if tariffs come down and will be open about it as we are now.

We will have to evaluate the situation at the time and we will update this page accordingly.