Is owning a mattress business a mystery to you? How is it possible these mattress businesses make a profit and stay in business?
The current population of the United States of America is 333,685,997. Considering everyone uses a mattress that is replaced every ten years, this translates into more than 33.5 million mattresses being sold every year at substantial profit margins.
Is Owning a Mattress Store Profitable?
Owning a mattress business is all about gaining market share. If the mattress business has a small market share, then it is hard to survive.
This is why you see chains of mattress stores across the country attempting to take a bigger slice of the cake of this lucrative industry sector.
Suppose we accept that a mattress is changed on average every ten years. In that case, a yearly market of 33.5 million mattresses across the country is a hugely profitable business to be involved in.
Part of the key to gaining market share is being visible to the public, which is why we see so many mattress stores dotted around the country.
Of course, these stores are located in areas where it is possible to receive high foot traffic. You may not enter the store, but you certainly know it’s there and has even become part of the fabric of the community.
How Much Money Do Mattress Sellers Make?
There is a factoid on the internet stating that a mattress selling for $300.00 has a manufacturing cost of $300.00. That’s a massive 900% markup! The factoid is not disputed.
We need to reasonably consider that the mattress store owner is not making a 900% contribution to profit on each mattress it sells unless the mattress store owner is also the manufacturer of the mattress.
However, after the business’s overheads, the salaries in a mattress business are not fantastic, with salespeople making a base salary of 15k and managers 55k.
So, if you are considering working in a mattress store, you will need to be an excellent salesperson to have high earning potentials.
I guess the real question here is how much do the store owners make? It’s a kind of impossible question to answer, but one thing is for sure they are not on the bread line.
If you are familiar with Mattress Mack, his reported yearly revenue was 200 million every year and dropped in recent time to 150 million. He has a reported net worth of 300 million.
All in all, it looks as if the mattress business is very profitable, and maybe those 900% markups are an actual figure!
What Is The Profit Margin On Mattress Sales?
There are all kinds of indexes to view, but the truth is whatever you look at is based on averages. This is how investors look at the market, averages across seasonal sales.
The answer is because there are so many variables to factor into the equation. How much is your rent, how many staff do you hire, and on and on, you get the picture.
However, the reported profit margin for the store owner is approximately 50% which is a pretty good profit when you consider some mattresses are more than $3000.
However, not every mattress is high-end, so that the actual margin may remain the same, but the incoming revenue is significantly less. Hence, it’s vital to understand mattress store owners also need to sell high volumes of mattresses.
Selling a large number of mattresses every month needs marketing which usually is in the form of discounts.
Every mattress store has a sale that never seems to end, and discounts are offered frequently to attract more people through the doors.
Don’t forget if you have your mattress store. There are opportunities to extend profitable product lines. You may wish to extend into bedding and pillows.
Most of you know Mike Lindell and how profitable his pillow company has become.
The opportunities are vast for a mattress store owner to add revenue to the bottom line.
How Much Does It Cost To Start a Mattress Firm?
The first thing you need to do is due diligence. Is the store viable in the location you are proposing? You will need to make sure your store is visible, and the potential for foot traffic is high.
Many mattress stores are located in shopping malls. This is not by accident, and the Mattress retailer is located in the shopping mall to offer potential customers a one-stop shopping experience.
However, the rental will be higher, and the lock-in periods may be prohibitive for the first-time mattress store owner.
In some cities like Chicago, IL, you could set up your mattress store for as little as $ 50,000.00, and the mattress demand is just as high.
You will need to set up your mattress business in a city with a large population. The more affluent the city will attract higher rental payments for the store.
However, if you head down to Houston, Texas, the cost of entering into a mattress business will be significantly higher, and the competition will be much more challenging.
Don’t view competition as being a bad thing. In some ways, they have blazed the trail for you to enter the market and have done advertising on your behalf.
Regardless of whether you need finance or not, you will need to create a realistic business plan. Your business plan should include all of your expected outgoing and all of your expected sales. Try to project over a few years to have a realistic picture of what you can expect in terms of revenues.
Along with your business plan, write an executive summary. This is simply why you think it’s a good idea for a mattress retail outlet in a particular location.
Don’t forget to include competition analysis. Understand where your competition is located and their selling prices.
Marketing should be a significant portion of your business plan. You need to know how to get some market share without entering into a price war.
Always keep in mind why you are going into this business, and that’s profit.
There are many other aspects to a business plan, but it’s essential to have one.
So, it seems as if you can start your own business for as little as $50,000.00.
There is more than one way to start a mattress firm. You could consider franchising, and franchising has many advantages for the first-time mattress firm franchisee.
You could buy into an established brand and a mattress firm with brand equity. What do I mean about brand equity?
The name is recognized, the business is established. However, there are some disadvantages.
You will be locked into specific sales figures and the products that the franchiser is selling.
It could make entry into a profitable market sector easier for the less experienced entrepreneur.
One of the fastest-growing mattress sectors throughout the country is the box mattress sector.
We all shop online more and more and get everything delivered to our front door. It’s convenient and so many times cheaper than buying from a retail outlet.
If you get tired of salespeople trying to strong-arm you into making a purchase, then box mattresses are well worth considering.
The box mattress industry is growing exponentially, and for a good reason. Box mattresses are great value for money and provide some of the best comforts to be found in the mattress market.
Can you become involved and make a profit from selling box mattresses? The answer is yes, and the entry-level is easy in comparison to being a mattress store owner.
The system can be lucrative once your web pages gain momentum and orders are placed through you. The box mattress seller does everything else, including transferring cash to your bank account.
Mattress Life Cycles
Whatever mattress you choose, they have a natural life cycle if used daily, and the average life of any mattress is around 8 years, and they get replaced on average every ten years.
The US market is enormous in this industry and will only grow in the coming years for both traditional and box mattresses.
How Do Mattress Stores Stay In Business?
Mattress stores stay in business because they make healthy profits. It may seem as if the store is empty every time you drive by, but this is all part of the business and is accounted for.
Profits of 50% and higher can be expected on the bottom line, and with a burgeoning market, there are no shortages of sales.
Location is important to the successful outcome of the mattress store, and this is why we have seen so many at our local malls. The number will keep growing.