How Do Mattress Stores Stay In Business?
Mattress stores survive because they generate a good profit. When you drive by, it may appear like the store is vacant, but this is all part of the business and is accounted for.
The population of the United States of America is 333,685,997 people. Everyone uses a mattress that is updated every ten years, which equates to more than 33.5 million mattresses sold yearly at significant profit margins.
According to IBISWorld, there are about 16,000 mattress retailers in the United States. These 16,000 shops generate a total of $14 billion in sales.
Mattress Firm is one of the most prominent mattress businesses in the United States, with over 2,600 stores nationwide.
That’s a lot of space simply for beds. Many of these businesses produce enough money to cover their rent and then turn a profit. Continue reading to find out how they manage to remain afloat.
Do you ever wonder how mattress businesses stay in business? You may find a mattress store in whatever city you visit. Even though the companies look empty and lonely, a new one is opening. Even though the businesses look empty and lonely, a new one is opening.
Why are there so many stores for mattresses?
How do they keep up and stay open when the exhibit room looks to be regularly empty?
Are the owners still profitable despite sporadic purchases and hefty overhead? How do they make ends meet?
These may be the thoughts racing through your mind every time you pass a mattress store.
You would suppose that the fundamental reason for their existence is that humans prefer to sleep. However, there is an economic justification for this.
Your questions will be answered shortly. Simply keep scrolling.
Reasons On How Mattress Stores Stay In Business
How do mattress stores stay in business?
According to Global Market Research, you’ll be shocked to learn that the global market for mattresses is expected to increase at a 6.8 percent annual pace between 2018 and 2023.
According to IBIS World, approximately 16,000 mattress businesses are open, with 175 online bed-in-a-box providers operating solely in the United States.
The United States spends the most on mattresses of any country in the world, generating over $14.5 million in sales this year with a 0.9 percent yearly rise.
Why are there so many? You may be startled to learn such figures, especially in light of the current economic crisis.
Introduction of new technology
Introducing new technologies in the mattress business has made it simpler for consumers to have mattresses personalized to their preferences.
The readiness to investigate new and improved mattresses is as high as what the industry is looking for.
Because of this intentional effort, the average consumer must replace their mattress every eight (8) years.
Demand for mattresses in the hospitality industry:
The expansion of the hotel business is another element that has affected the demand for various types of mattresses. To attract more guests, international hotel chains focus on delivering exceptional comfort and sound sleep, which boosts the mattress business.
High margins and low overhead:
At this point, economics enters the picture. Regarding retail, the demand for mattresses has the highest profitability. According to a survey, although some retail chains may get a 5% profit margin, mattresses have a 40 to 50% pricing margin.
Furthermore, a mall-located mattress company may only need to sell 20 mattresses monthly to cover a leasing cost, unlike McDonald’s, which must sell 500,000 burgers to cover its rent.
To summarise, shops are not required to sell that many mattresses to pay operational costs and profit.
Mattress stores don’t need a floor full of salesmen since they offer fewer things, giving them a cheaper overhead than other firms.
They don’t usually have a large number of employees working at the same time. Most employees are paid on commission and frequently deal with factory-direct items.
It might explain how mattress businesses can keep those seemingly empty showrooms running with one person sitting behind a desk.
Customers prefer to buy in-store versus online:
You’ll probably use it for at least 8 to 10 years before purchasing another. Furthermore, you spend around 33% of your time sleeping. As a result, many individuals are hesitant to buy a mattress blindly.
Because this is a large purchase (both in terms of price and importance), clients prefer to buy mattresses in person rather than online, as they would when purchasing furniture or a car.
Even clients who want to buy a mattress online will always visit a retail store before placing their order. It implies more foot traffic in stores and the opportunity for companies to offer bargains and discounts to shoppers who merely want to explore.
Lower product losses:
If the owners cannot sell the mattresses, they might keep them for a period. People do not buy mattresses in large quantities, but a mattress maker may sell them for thousands of dollars each.
Unsold mattresses retain their worth exceptionally well as well. It is still feasible to sell a mattress that was not purchased in a few years for the same price. And they’d all eventually purchase a mattress or two.
Is Owning a Mattress Store Profitable?
Having a mattress business is all about expanding your market share. It is difficult to survive in a mattress company with a limited market share.
This is why you see mattress shop chains all over the country vying for a more significant piece of this profitable industrial segment.
Assume that a mattress is replaced every 10 years on average. In that situation, a 33.5 million mattress market throughout the country is a very successful company to be a part of.
Being visible to the public is essential for obtaining market share, which is why many mattress stores are scattered around the country.
Of course, these establishments are in regions with a high likelihood of foot traffic. You may not enter the business, but you know it exists and has even become a part of the community’s fabric.
Is the mattress business profitable?
The mattress business is a highly competitive and profitable industry. The top five companies in the United States control almost 60% of the market, and they generate over $1 billion in revenue each year.
Mattress manufacturers have been able to increase their profits by raising prices and cutting costs. However, there are signs that the industry is becoming saturated, and competition is increasing.
As a result, it will be more difficult for mattress companies to maintain their high profits in the future.
Is Owning a Mattress Store Profitable?
Yes, But There are a few key things to keep in mind when deciding whether or not owning a mattress store is profitable. The first is that, as with most retail businesses, the location of the store is key.
A store located in a high-traffic area is more likely to be successful than one located in a low-traffic area. Additionally, it’s important to consider what type of mattresses you’re selling.
Stores that specialize in higher-end mattresses (such as those made from memory foam or latex) are more likely to be profitable than those that sell lower-priced mattresses.
Finally, it’s important to keep an eye on your overhead costs and make sure they’re not too high. If your rent and other expenses are too high, it will be difficult to turn a profit no matter how good your sales are.
Mattress stores exist because they generate a good profit. When you drive by, it may appear like the store is vacant, but this is all part of the business and is accounted for.
Profit margins of 50% or greater may be predicted, and with a thriving market, there will be no scarcity of sales.
The location of the mattress business is critical to its success, which is why we have seen so many in our local malls. The number will continue to rise.