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Comment by chiph | Hacker News Reader

I've been wondering what the margins are on mattresses. You see stores selling them all over the place. There's usually only one or two employees in there, and they're devoid of shoppers most of the week (weekends are big days for them). So they have to pay rent + utilities and presumably commission, but are selling these items one-at-a-time to only occasional customers. The mark-ups have to be insane to support that.

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Marketplace did a story on exactly this phenomenon: http://www.marketplace.org/2016/05/02/world/why-are-there-so...

To sum it up: "Mattress stores have low overhead, low labor costs and higher-than-usual profit margins, Sam Woods said, Senior Vice President of Sales and Operations for Mattress Firm.

“If you sold three or four beds a day, and your average ticket is $1,000, that’s a $4,000 day, times 365. All of a sudden you’ve got more than a million-dollar business there,” he said."

Furniture items of all types have a large markup. It's because volume is so low and as a shop owner you have a lot of money tied up in inventory.

According to "The Straight Dope" markups are "Stupenduous", at each level of the chain, and manufacturing competition is actually limited.

"Consumer Reports puts gross profit margins on mattresses at 30 to 40 percent, both for wholesalers and for retailers, and up to 50 percent for makers of super-luxe products."

http://www.straightdope.com/columns/read/3265/why-are-there-...

Check out Tuft & Needle, there was an article on HN a few years back

https://www.tuftandneedle.com/about/truth/

I know nothing about the mattress business, but many shops, especially those on fancy addresses, lose money and instead function as branding instruments. Its possible that the stores you've observed work as showrooms and have attached warehouses, servicing a wholesale operation where the money is actually made.

There's a mattress store in Milwaukee that has no employees at all. I saw one of their locations in a mall. Just a bunch of beds, a phone number painted on the wall if you have questions, and a computer in the corner for ordering. I thought it was brilliant. Who needs employees?

That is a good idea! I quite fancy a few new mattresses and a computer.

This has been explored in the press recently and apparently the margins are very high. The sales experience is also poor as you'll see an ad for a $599 bed and when you visit the store you'll get an aggressive upsell. Worse, if you fight the upsell, the $599 bed is magically out of stock or will require 4-6 weeks delivery while the other more expensive items can be delivered tomorrow.

My last two beds have been from either Costco or Sam's Club. No high pressure sales, less bullshit, and better pricing. The one time my wife and I went to a mattress store, we paid probably 30% more than the warehouse club prices and the bed's springs went bad years earlier than expected.

I highly recommend avoiding mattress stores.

Check out Saatva.

There are tons of mattress companies trying to "disrupt" the market right now. Leesa, Casper, Tuft and Needle, etc. I personally went with FloBeds (older company, all-latex mattresses, hippy dippy, in California) and couldn't be happier.

http://www.themattressunderground.com has lots of good info if you're in the market. Casper and the rest aren't bad deals, but there is better / different stuff out there without the terrible mattress store business model.

I just find it easier to lay down on the bed at the warehouse club to see if I like it than taking a chance online. I lean towards a firm mattress but not too firm. Its sometimes tough finding the one I want and doing mattress returns via the internet sounds like a nightmare.

Many of these companies will offer you no questions asked money back guarantee after 90 or even 120 days of trying it in your home. That's got to be better than 5 minutes at the warehouse club trying to imagine what it's like to sleep on.

Casper has a 100 day no-questions-asked return policy. We ended up returning one of their mattresses and it couldn't have been easier. They send somebody by your house to pick it up.

Just depends. I believe the average is somewhere between 40-60% for most name-brand mattresses. However, off-brand mattresses probably have higher margins, due to them being cheaper in general.

Unbranded products are commodities and therefore should have lower margins.

Seems the parent used "off-brand mattresses" and you used "unbranded products", which is quite a bit different

Can you elaborate for me? I thought those two were synonyms.

Unbranded generally means generic, off-brand usually signifies it's branded, but not with a recognizable brand. Generic products are generally cheaper, but off-brand products can try to masquerade as higher-market items (especially when you're dealing with a purchase as infrequent as a mattress) and can claim higher margins.

What would you call something made in the 3rd shift? Where they use the same materials and factory they use for making branded gear, but don't put the brand on it?

It's not necessarily when/how they're made (although that's part of it), but how they're marketed. Take soft drinks for example.

    Brand-name: Dr. Pepper  
    Off-brand: Dr. Perky   
    Unbranded/Generic: "Soda" in a white can

Generic or unbranded, depending on how the product is labeled. The thing with those two labels is that, since you don't have someone actively trying to maintain those brands, you as a customer don't know if they're actually using the same materials and factory (or at least that's the theory behind why a brand would be worthwhile at all).

We have a family connection to get dealer pricing on mattresses. A $3,000 brand-name mattress set is under $1,000 delivered.

Are these actually any better than beds from a place like Leesa or Casper?

I don't have any experience with those brands. We have a foam/innerspring hybrid mattress that is a good mix of soft surface with overall very firm support. It's also like 200 pounds so it doesn't shift when your partner moves.

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