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I would chalk it up to the fact that no one has tried (in the US). A startup could easily jump in on the cheap memory foam mattress game, but most mattress sell

by eyegor 7y ago

I would chalk it up to the fact that no one has tried (in the US). A startup could easily jump in on the cheap memory foam mattress game, but most mattress sellers are not startup folk. It's just so low effort to buy from serta, casper, etc. with absurd markups since that's the market rate. The "competition" looks a lot like the used car racket, but you don't need to join the car dealership cartel to sell mattresses. I'm guessing the big manufacturers have contracts that spec out minimum reseller prices with threats to stop supply. It's just ridiculous to think that all mattress sellers would risk easily being undercut running 2000+% markups. As for a startup, generally people don't buy mattresses that often, but I know I would if they were 100$. Even cheap ones end up around 5-700$, which is nowhere near an impulse buy. As a result, I only replace a mattress if it's completely worn out, which takes a solid 10-15 years. Funny how popular it is to replace the 800$ phone every 1-3 years but 1-3k$ has to wait until the mattress is unbearable. Everyone I know has this attitude for mattresses.

twostorytower 7y ago
A few thoughts here. 1) There are already lots of cheap memory foam mattresses that are relatively well reviewed on Amazon for example this one for $200 https://www.amazon.com/dp/B00474X5DO/ref=cm_sw_r_tw_dp_U_x_z3YtEbVJPRY5H https://www.amazon.com/dp/B00474X5DO/ref=cm_sw_r_tw_dp_U_x_z... (not a recommendation, just looked it up). 2) The average markup isn't 2000%. You can look at Casper's COGS in their S-1. Also, the return rate is built into the cost, so that adds to it. 3) In general, a cheap mattress is going to be perceived as low quality. It's like how nobody wanted Warby Parker glasses when they were priced around $20. Then they changed the price to $99+ and they actually improved sales.
135792468 7y ago
Thought so too until I got into the industry. The establish players have run up marketing costs so that your average cost per acquisition can get out of hand quickly. It’s really hard to crack profitability with a cheap mattress. I’d have to look at my data to see CPC costs but i tried a lot of angles and channels to generate sales cheaply and struggled to find anything sustainable. CPCs, ad dollars, imagery, affiliate commissions hell, It’s only a matter of time before some affiliate comes in this thread pumping their garbage mattress review site. Half of them you can even get listed on without them asking for a special deal or rate.

by eyegor 7y ago

twostorytower 7y ago

A few thoughts here. 1) There are already lots of cheap memory foam mattresses that are relatively well reviewed on Amazon for example this one for $200 https://www.amazon.com/dp/B00474X5DO/ref=cm_sw_r_tw_dp_U_x_z3YtEbVJPRY5H https://www.amazon.com/dp/B00474X5DO/ref=cm_sw_r_tw_dp_U_x_z... (not a recommendation, just looked it up). 2) The average markup isn't 2000%. You can look at Casper's COGS in their S-1. Also, the return rate is built into the cost, so that adds to it. 3) In general, a cheap mattress is going to be perceived as low quality. It's like how nobody wanted Warby Parker glasses when they were priced around $20. Then they changed the price to $99+ and they actually improved sales.

135792468 7y ago

Thought so too until I got into the industry. The establish players have run up marketing costs so that your average cost per acquisition can get out of hand quickly. It’s really hard to crack profitability with a cheap mattress. I’d have to look at my data to see CPC costs but i tried a lot of angles and channels to generate sales cheaply and struggled to find anything sustainable. CPCs, ad dollars, imagery, affiliate commissions hell, It’s only a matter of time before some affiliate comes in this thread pumping their garbage mattress review site. Half of them you can even get listed on without them asking for a special deal or rate.