Mattress Firm is the largest specialty mattress retailer in the US. Verify your account. ? Like I said, this sub is probably the perfect place to discuss. The markup on mattresses is pretty steep & there's virtually no aftermarket for used ones. and pick the featured episodes for your show. It's pretty cheap to set up a showroom with 2-3 people working there. The answer to all of these is fairly straight forward, there is a tremendously high mark up on the mattresses sold in retail stores. In other words, they're relatively cheap to start up and run compared to most other retail, and there's currently an oversized demand that can keep a whole bunch of stores in business. I'm just getting the ball rolling. How many mattresses can you sell in a day to make a store like that profitable? Funny. New comments cannot be posted and votes cannot be cast. Are the mattresses full of money? A conspiracy theory recently went viral on Reddit after a user suggested that Mattress Firm was a front for a large scale money laundering scheme. Interesting. Because there can be. Why open a mattress store when there’s another just down the street? The reasons are similar to why there are so many physical stores. Everywhere you look — you can’t escape them. Dream Bed Mattress Review the Mattress in a box from MATTRESS FIRM! It certainly feels like there is no possible way that all of those stores could sell enough mattresses to turn a profit especially when they are sometimes directly across the street from each other. Likelihood of Being Satisfied: Online Buying Vs Store Buying. Cookies help us deliver our Services. How did they end up catty-corner across intersections and in the same shopping centers? Why There are So Many Online Mattress Brands. Press question mark to learn the rest of the keyboard shortcuts. Mattress Firm, in an annual investor deck (you can google it, it's public information) quotes a statistic about how, on average, they can recover the cost of acquiring a store within 12 months (hence funding their consolidation of the market). He said retailers realized that mattresses had the highest markup of any furniture item so they decided selling mattresses only would reap the most profit. Listen to Brought to you by... episodes free, on demand. Some argue that the company has too many stores, sometimes in high concentrations. Years ago I asked a friend who used to own a furniture store why suddenly there were all these standalone mattress stores everywhere. The actual mattresses are kept in single local/regional warehouse for delivery. Why so many? Yet here, in 2018, there are countless Mattress Firmy-type stores that persist, despite not having what business professionals and humans with eyes would call “any hope of a customer base.” Also, some mattress companies advertise that you're supposed to change your mattress every 8 years, which does get people to act on getting a new mattress, This and also all the advertising for mattresses like people buy a new one every 3 months. Would love to hear other opinions (several in this sub have owned stores). Aren't mattresses supposed to last years? 8 8. comments. The mark up on a typical mattress sold in stores can be anywhere from 100-500%, and even more in some cases. Educational. My impression is that it only takes ~25 sales a month to keep a mattress store going, and even after Mattress Firm bought up all the stores and filled them with the same people / product / prices, they didn't stop making money. Right across the street are two more mattress stores. A comment on Reddit … Years ago I asked a friend who used to own a furniture store why suddenly there were all these standalone mattress stores everywhere. One thing I truly hate is the inventor of the "no-flip" mattress. Honestly, I have bought one mattress in my adult life and I cannot conceive how a city can sustain so many mattress stores. Why Are There So Many Mattress Stores? New comments cannot be posted and votes cannot be cast, More posts from the NoStupidQuestions community, Press J to jump to the feed. There are about 175 online bed-in-a-box companies in business. But why are they so often clustered together? And how do they stay in business? “Honestly, I have bought one mattress in my adult life, and I cannot conceive how a city can sustain so many mattress stores,” Arens-Terpstra said. And I realize that there are specific shops for beds like sleep number and tempurpedic...but it goes beyond that. Looking forward to more opinions! Are you the creator of this podcast? I mean damn that is one high mark up!!! They are often clustered so closely together in towns and cities that you can literally drive to three or four mattress stores within a radius of a mile or two. You used to just buy mattresses in furniture stores. You used to just buy mattresses in furniture stores. Where the family gives asks Why Are There So Many Mattress Stores and Other Questions. Agree. Why Are There So Many Mattress Stores? So how can they afford the real estate? And so, in the last three years or so, much of this pent-up demand has really released and encouraged many of these mattress companies to open new stores at a rather rapid pace. Like there will be three in a row sometimes, or it seems like there's one in nearly every strip mall. Now, the sleeping giant has a unique concentration of stores which are often in close proximity, leading many to wonder: why so many? Many consumers believe there is a much higher risk of being dissatisfied when buying a mattress online – that is, when buying it untried without an opportunity to lie on it first.. Our research shows, however, that owner satisfaction is fairly similar whether people try a mattress before buying or not. : Planet Money There are so many mattress stores in America, and they always seem to be empty. Most mattress "stores" are actually just showrooms. Actually, furniture carries a higher average margin than mattresses. http://freakonomics.com/podcast/mattress-store-bubble/. That it’s not over yet. So why are there so many Mattress Firms? Love. This person realized you could save money on manufacturing and cut the life of the mattress in half thereby guaranteeing more sales in the future. There's more I can add to this list, but I'm sure you get the point. Mattress Firm has received some unlikely attention this week after a wild conspiracy theory about why there are so many store locations went viral on Reddit. Consider a mattress that a store sells for $1,000. Why else are there so many mattress stores? So how can they afford the real estate? But - with such a high mark-up, why had it taken SO long for alternative companies to come in and undercut? KEN STEIF: So, they’re really two dynamics that work here. Even the CEO of Mattress Firm agrees Chicago probably has a few too many mattress stores — but there's a method to the madness. How do they end up next door and across the street from each other? He said retailers realized that mattresses had the highest markup of any furniture item so they decided selling mattresses only would reap the most profit. Americans must love sleeping. Clothes have a higher margin than mattresses and countless other items that you purchase on a much more regular basis. 2) The average lifespan of a mattress is 8 to 10 years. Why Are There So Many Mattress Stores In Austin? Once it proved true, the mattress store concept exploded. I recently had to go mattress shopping, and now I notice they are EVERYWHERE. So mattress delivery by drone is still a ways off. Who buys a mattress often enough that there are more mattress stores than car dealerships? ...but things happen. Which seems crazy – people buy coffee quite often whereas mattresses are purchased on average every decade – how is this possible? Reddit … Why are there so many mattress stores? Why Are There So Many Mattress Stores and Other Questions. Update: 2018-12-13 8. Online companies have little overhead costs and high profit margins. Why Are There So Many Mattress Stores in America? Sales people basically work on commission. Are the mattresses full of money? In less than half a square mile, count them - six mattress stores. Eh, there would not be a no flip mattress if people didn't buy them. A mattress can easily be marked up 40, 50 percent, 100 percent, and even more. And how do they stay in business? At the time the conspiracy theory went viral, there were as many as 3,500 Mattress Firm stores nationwide—and 9,200 mattress stores total (counting every chain). The mattress stores are visible because so many people drive by them every day, McDermott said. Some mattresses will wear out fast depending on how people treat it. Description. Planned obsolescence at it's finest! There are now over 9,000 specialty mattress stores in the U.S. That’s more mattress stores than Starbucks stores! 3) If people are only buying a mattress once a decade, then why are there so many mattress stores? Press J to jump to the feed. Why are there so many Mattress Firm stores? Along with Starbucks, drug stores and cellphone carriers, mattress retailers gobble up prime real estate. - Duration: 3:15. But again, these stores aren’t just surviving, they’re flourishing — that market share has more than doubled in the last 20 years. I don't live in a crummy area; but seriously, wtf? share. I recently had to go mattress shopping, and now I notice they are EVERYWHERE. Are they money laundering fronts? Press question mark to learn the rest of the keyboard shortcuts. We go on a mission to find out why there are so many Mattress Firm stores. 3:15. America doesn’t have too many mattress stores; it has too many stores. There are so many mattress stores in the America, and they always seem to be empty. When people move, it's sometimes easier to buy a new mattress than move it. And this is true for many types of retail — for clothing, for example and so on — where margins are quite low. "I think retail is noticed by people because they tend to be the highest visible locations," he said. Mattress Firm had a toehold in the Boise market with a smattering of stores when it acquired Sleep Country USA in 2015. There are three primary reasons why there are so many mattress stores in America: Running a mattress store … How could a company with such a slow-moving product manage to keep so many stores open, many Reddit … Bedbugs forces you to buy a new mattress no matter how old your mattress is. By using our Services or clicking I agree, you agree to our use of cookies. Every three months? So … The stores appear to be deserted yet there is a new one opening almost every week. Share. Feb. 17 -- You can’t walk more than a couple blocks in Manhattan without passing a Starbucks, Chase Bank or Duane Reade. You’re standing in a mattress store. Why are there so many mattress stores in Chicago? Why are there so many Mattress Firms right next to each other? There are so many mattress stores in the America, and they always seem to be empty. This is what you're looking for http://freakonomics.com/podcast/mattress-store-bubble/. Wow. A place to discuss anything to do with mattresses, mattress accessories, and sleep technology. So I would expect across the whole U.S. that we probably will see net growth of mattress stores. So that might explain why we’re seeing so many mattress stores out there. Listened to this and it makes more sense now. Bloomberg QuickTake Originals 29,004 views. Why Are There So Many Sleepy's Mattress Stores? You buy mattresses once every 8 years or so, that is why the margin is "high." So, are you sure your not pissed that folks bought the less expensive option. Turns out the economics make perfect sense: Running a mattress store doesn’t cost much. The online only mattress retailers actually have a higher average margin than a brick and mortar retailer (even though they claim the opposite). 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