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Having worked for one of the major mattress firms, there are truths in the article, but also some serious mistakes. The pricing structure, where they hide the
by silverbax88 14y ago
Having worked for one of the major mattress firms, there are truths in the article, but also some serious mistakes.
The pricing structure, where they hide the models by using different names across retailers, is 100% true. They absolutely do that to prevent price shopping.
The markup math is off. Mattresses are a high margin business, but most of those mattresses you see in specialty retailers are not built until someone buys one. You see, those mattresses are custom to the customer - from the tick (stitching pattern, which creates a firmer or softer surface) to the foam density, to EVERYTHING. It's like ordering a car where the car is measured to a specific person's height, weight and engine preference. You can imagine what a returned mattress is worth. Pretty much nothing. The margins have to cover all of that. Are the margins good? Yes. Would a small company be able to cut their margins to make one-off custom mattresses and compete? ...maybe.
Finally, there are retail outlets - Costco, Ikea, that buy from those mattress companies in bulk and sell generic mattresses much cheaper.
So, yeah, there's some market there but not as rich as some might think.
- jackalope 14y agoA used mattress is worth about the same as a used pair of underwear. This has nothing to do with custom options.
- silverbax88 14y agoThat's what I meant, I just assumed people would understand that a custom-ordered mattress was 'used' once it has been taken home and returned no matter whether someone slept on it or not.
- kinofcain 14y agoWhat happens in a specialty high-end mattress store has very little to do with the bulk of the market: people buying mattresses at Macy's or one of the numerous regional mattress chains. I don't have any experience in the super-high-end, but have worked with the low-middle-high end that you get going to a "mattress store". Those models are definitely not built-to-order, they're sitting in a warehouse waiting to be delivered, even the $4k+ ones that are trying to compete with the custom shops. For the bulk of mattresses the margins mentioned in the article are conservative. What you're absolutely correct on, however, is that the cost of building a mattress doesn't represent the cost of running a mattress business. However, that's exactly what makes it ripe for disruption: streamline the rest of the business model and loot the manufacturing margins.
- silverbax88 14y agoThose mattresses sitting in a stack are bulk orders negotiated by the retailers. But you can still walk in and order something they don't have in a back room. Those are built and shipped. But that's not true for all mattress companies, just some.