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