When you really stop to think about it, it seems strange that mattress stores can make money. After all, most people only replace their mattress about once every decade. Since people buy new mattresses so rarely, it seems like it would be hard for these businesses to turn a profit.
As it turns out, however, most mattress stores do fairly well despite these hurdles. For mattress stores, making money is possible thanks to several contributing factors.
First, nearly everybody sleeps on a mattress. From young children all the way up to elderly people, practically everybody lays down on a mattress when they go to bed at night. That means that the potential customer base for mattress stores is huge. Even if people wait a long time before replacing their mattress, there are enough customers out there to keep these businesses going.
Mattress stores also don’t need to carry a lot of inventory. Typically, they are set up with a display area where they have all of their available models set up so that people can try them out.
When someone decides to order a mattress, the mattress store typically reaches out to the manufacturer or to a local distributor and has the mattress shipped to the customer. This keeps inventory costs for these businesses quite low, making it easier for them to stay profitable.
Oftentimes, mattress stores set up shop in somewhat out-of-the-way retail areas where rent is a little bit lower. They don’t need to be right in the heart of the action like a lot of other retailers. Instead, they can choose an out-of-the-way strip mall or other location that is a little bit off the beaten path. After all, they aren’t trying to capture foot traffic. Instead, they count on the fact that most people will look up mattress stores in their area and go wherever they are.
Another reason why mattress stores are able to generate money is because of the relatively large profit margin offered by mattresses. Large pieces of furniture like mattresses usually have fairly high markup percentages. For instance, if a mattress costs $400 to manufacture, the retailer may be able to sell it for $800 or more. That means that for every sale they make, they earn quite a bit of money. Since the profit margin is high, they don’t have to make a ton of sales each month to still earn a decent amount of money with their business.
A lot of times, people wonder how mattress stores can possibly make money since customers don’t replace their mattresses very often. Even though buying a mattress is a fairly rare event, it is something that everybody needs to do at one point or another. That is one of the reasons why these stores are able to make sales. As an added bonus, they don’t need to carry a lot of inventory, they can usually rent retail space in areas where it is less expensive, and most mattresses have quite a bit of profit built into the retail price.