Have you ever noticed the proliferation of mattress stores over the past 15 years? There are now over 9,000 specialty mattress stores in the U.S. That’s more mattress stores than Starbucks stores! Which seems crazy – people buy coffee quite often whereas mattresses are purchased on average every decade – how is this possible? Why are there so many mattress stores?
Here are some answers according to people who have studied this important and fascinating question.
Profitability. The Mattress Industry is HUGE – estimated at about $30 Billion – and PROFITABLE: mattresses are some of the most marked up goods with ginormous margins – usually ranging from 40% – 900% with the margin generally rising with the price of the mattress. Adding to the profitability is the lack of inventory the stores carry because purchased mattresses are shipped from warehouses and the fact that very few salespeople are needed due to the low volume business and the salespeople are usually paid on commission. Thus, somewhere between 5-20 mattresses need to be sold a month for a mattress store to break-even. So, a primary reason for so many mattress stores is that it is easy to make a profit with each store opened.
Illustration of typical mattress margin – from Slumbersage.
Marketing. Even when a mattress store is not profitable it may be kept open to serve as sort of a billboard for other stores. Driving past Mattress Firm after Mattress Firm may make us more likely to buy from a Mattress Firm.
The Economy. Buying a new mattress is something that can usually be put off for a few years. During the great recession mattress sales tanked and created pent up demand for mattresses which spurred the proliferation of mattress stores. All those college-grads who moved back in with their parents have been leaving home and need to buy mattresses.
People Still Like to Try Out Their Beds. Online sales of mattresses, while growing rapidly, still only makes up about 6% of total mattress sales. Most people still prefer to touch, feel and lie on the mattress they are going to sleep on for the next 10 years or so. Note, however, that the younger generations are much more comfortable (pun intended) buying mattresses online.
I could have sworn it’s impossible to make more than 100% margin, maybe that’s one of the classes I skipped.?
Good point brad – I meant markup instead of margin. Good catch!!!
Imagine a coffee store and mattress store combination: StarMattressBucks
People would never leave…mostly because it would take several days to order coffee and the mattress you want.
Mattress Barrista: “What can I get for you?”
Customer: “Wow, so many choices…the usual I guess, a mocha cafe latte chi grande queen size with cinnamon, pillow top, gel layer with coil spring cup and low profile with scoop of steamed milk on an adjustable frame…Wait! Make that 2, but on the second, put a smiley face emoji in the swirl, on the mattress too!…
Earlier this year there was a conspiracy about mattress stores opening up because it was an easy way to launder money. It is interesting that a company that large will open up a store directly across the street from another store that they own. I may have to do some investigating of my own. Think the store would let me lay on a mattress all day while I count the number of customers they have?