The mark up on a typical mattress sold in stores can be anywhere from 100-500%, and even more in some cases. You used to just buy mattresses in furniture stores. New comments cannot be posted and votes cannot be cast, More posts from the NoStupidQuestions community, Press J to jump to the feed. - Duration: 3:15. 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.” Which seems crazy – people buy coffee quite often whereas mattresses are purchased on average every decade – how is this possible? Are the mattresses full of money? 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. So … In less than half a square mile, count them - six mattress stores. Americans must love sleeping. And it’s not just Chicago. Years ago I asked a friend who used to own a furniture store why suddenly there were all these standalone mattress stores everywhere. Why There are So Many Online Mattress Brands. 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. Bedbugs forces you to buy a new mattress no matter how old your mattress is. There are so many mattress stores in the America, and they always seem to be empty. Why open a mattress store when there’s another just down the street? We go on a mission to find out why there are so many Mattress Firm stores. ...but things happen. http://freakonomics.com/podcast/mattress-store-bubble/. The answer to all of these is fairly straight forward, there is a tremendously high mark up on the mattresses sold in retail stores. Would love to hear other opinions (several in this sub have owned stores). Funny. The markup on mattresses is pretty steep & there's virtually no aftermarket for used ones. And how do they stay in business? But again, these stores aren’t just surviving, they’re flourishing — that market share has more than doubled in the last 20 years. Listen to Brought to you by... episodes free, on demand. Some mattresses will wear out fast depending on how people treat it. Planned obsolescence at it's finest! You buy mattresses once every 8 years or so, that is why the margin is "high." So why are there so many Mattress Firms? Now, the sleeping giant has a unique concentration of stores which are often in close proximity, leading many to wonder: why so many? Agree. When people move, it's sometimes easier to buy a new mattress than move it. I mean damn that is one high mark up!!! Love. Turns out the economics make perfect sense: Running a mattress store doesn’t cost much. So how can they afford the real estate? KEN STEIF: So, they’re really two dynamics that work here. Reddit … So mattress delivery by drone is still a ways off. A comment on Reddit … And I realize that there are specific shops for beds like sleep number and tempurpedic...but it goes beyond that. ? But why are they so often clustered together? Why Are There So Many Mattress Stores? Even the CEO of Mattress Firm agrees Chicago probably has a few too many mattress stores — but there's a method to the madness. Where the family gives asks Why Are There So Many Mattress Stores and Other Questions. Why else are there so many mattress stores? I recently had to go mattress shopping, and now I notice they are EVERYWHERE. America doesn’t have too many mattress stores; it has too many stores. Once it proved true, the mattress store concept exploded. A mattress can easily be marked up 40, 50 percent, 100 percent, and even more. 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. 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. Along with Starbucks, drug stores and cellphone carriers, mattress retailers gobble up prime real estate. 8 8. comments. Who buys a mattress often enough that there are more mattress stores than car dealerships? and pick the featured episodes for your show. Likelihood of Being Satisfied: Online Buying Vs Store Buying. Some argue that the company has too many stores, sometimes in high concentrations. : Planet Money There are so many mattress stores in America, and they always seem to be empty. Mattress Firm is the largest specialty mattress retailer in the US. Everywhere you look — you can’t escape them. Eh, there would not be a no flip mattress if people didn't buy them. And when you compare selling mattresses, the contrast is quite stark. Driving by this cluster made Tanya Self and her boss reach out to 2 Wants to Know and ask, "Why are there so many mattress stores?" Description. The reasons are similar to why there are so many physical stores. How could a company with such a slow-moving product manage to keep so many stores open, many Reddit … I've seen the mattress store conspiracy on reddit and it made international news. 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. share. 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. Why Are There So Many Mattress Stores in America? Why are there so many Mattress Firms right next to each other? And how do they stay in business? A place to discuss anything to do with mattresses, mattress accessories, and sleep technology. How did they end up catty-corner across intersections and in the same shopping centers? Wow. 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. The actual mattresses are kept in single local/regional warehouse for delivery. 2) The average lifespan of a mattress is 8 to 10 years. Most mattress "stores" are actually just showrooms. Right across the street are two more mattress stores. Why are there so many mattress stores? 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. Why so many? Honestly, I have bought one mattress in my adult life and I cannot conceive how a city can sustain so many mattress stores. So how can they afford the real estate? Update: 2018-12-13 8. Press question mark to learn the rest of the keyboard shortcuts. How many mattresses can you sell in a day to make a store like that profitable? It's pretty cheap to set up a showroom with 2-3 people working there. Cookies help us deliver our Services. By using our Services or clicking I agree, you agree to our use of cookies. There are so many mattress stores in the America, and they always seem to be empty. 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. I'm just getting the ball rolling. There are now over 9,000 specialty mattress stores in the U.S. That’s more mattress stores than Starbucks stores! Why are there so many mattress stores in Chicago? So, are you sure your not pissed that folks bought the less expensive option. And this is true for many types of retail — for clothing, for example and so on — where margins are quite low. But - with such a high mark-up, why had it taken SO long for alternative companies to come in and undercut? I don't live in a crummy area; but seriously, wtf? Looking forward to more opinions! Like I said, this sub is probably the perfect place to discuss. Mattress Firm had a toehold in the Boise market with a smattering of stores when it acquired Sleep Country USA in 2015. Press question mark to learn the rest of the keyboard shortcuts. Edit: I did a Google search and saw mattresses are supposed to last 10 years. How do they end up next door and across the street from each other? Why Are There So Many Mattress Stores In Austin? Share. There are about 175 online bed-in-a-box companies in business. The mattress stores are visible because so many people drive by them every day, McDermott said. “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. 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. Dream Bed Mattress Review the Mattress in a box from MATTRESS FIRM! You’re standing in a mattress store. One thing I truly hate is the inventor of the "no-flip" mattress. Like there will be three in a row sometimes, or it seems like there's one in nearly every strip mall. 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 Sleepy's Mattress Stores? Sales people basically work on commission. Because there can be. You used to just buy mattresses in furniture stores. Actually, furniture carries a higher average margin than mattresses. This is what you're looking for http://freakonomics.com/podcast/mattress-store-bubble/. Every three months? Why are there so many Mattress Firm stores? I imagine they've cut costs down to a bare minimum so that the breakeven for an individual store is minimal. There are three primary reasons why there are so many mattress stores in America: Running a mattress store … 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. There's more I can add to this list, but I'm sure you get the point. Are you the creator of this podcast? Interesting. Are they money laundering fronts? 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. Years ago I asked a friend who used to own a furniture store why suddenly there were all these standalone mattress stores everywhere. Grab your wallet and go have mattress made to your specifcations any time you feel the need. Why Are There So Many Mattress Stores? 3:15. Clothes have a higher margin than mattresses and countless other items that you purchase on a much more regular basis. Feb. 17 -- You can’t walk more than a couple blocks in Manhattan without passing a Starbucks, Chase Bank or Duane Reade. Aren't mattresses supposed to last years? Why Are There So Many Mattress Stores and Other Questions. Online companies have little overhead costs and high profit margins. So that might explain why we’re seeing so many mattress stores out there. The online only mattress retailers actually have a higher average margin than a brick and mortar retailer (even though they claim the opposite). That it’s not over yet. 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). Listened to this and it makes more sense now. Educational. So I would expect across the whole U.S. that we probably will see net growth of mattress stores. Consider a mattress that a store sells for $1,000. Verify your account. I recently had to go mattress shopping, and now I notice they are EVERYWHERE. Bloomberg QuickTake Originals 29,004 views. 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). 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