We will delve deeply into the types of products, pros and cons shortly, but an important factor in getting the best deal possible is understanding how traditional mattress and furniture shops operate. I learned how they work by competing head to head with them, which is a short story I will share with you, which should make their operations more clear and show you how to navigate the misinformation that is rampant in the industry.
When I first opened my doors in Dallas, TX in 1998, I knew nothing about mattresses, to be honest. A couple of former business partners introduced me to the industry, and we figured out several ways to minimize traditional furniture retail expenses. I started my fist shop in 2 10x 20 mini storage units. My first month in business, I literally paid $2 for rent (we’ve all seen those “$1 for the first month” promotions at storage unit facilities). After that, my rent for the two units was about $180 per month (remember, this was in Texas, and in the 90s). I only advertised in newspapers, and had tiny, inexpensive ads that basically said I had new mattresses starting at $xxx price, and I put my cell phone number in my ads. People called me, scheduled a time to meet, and I met them in front of the storage unit and they would follow me in. I met with all of the customers myself, did all of the deliveries myself. My expenses, other than the products were just my storage units, my cell phone and some cheap small newspaper ads!
By working this way, I was able to offer the same products for about half price of what the big stores were offering on their best sales. Once I saw the actual price lists from the manufacturers, I was blown away by how much stores were charging for mattresses! To make matters worse, I had just purchased a new mattress a few months prior, and after making my purchase of a nice queen mattress for $699, I knew I had gotten an amazing deal, because that mattress had a “normal” price of $1399. I actually sold that same make and model mattress in my store, and it cost me $278. I sold it every day for $359, and as you can imagine, I never ran a sale. I didn’t have to - I was already about half price of their “sale price.” I also couldn’t – I was only making about $80 every time I sold it, and with that, I had to pay all of my business expenses (small as they were), and myself. That, of course is the nature of business!
Before long, I was taking hundreds of sales per month from the big guys. I was selling 40 – 50 mattresses every week, and my customers loved me! Some people bought very basic mattresses for as little as $150 for a queen set, and some were really nice and luxurious, and I sold them for over $1,000, but regardless of the price I sold it for, the other stores were selling the same or comparable mattresses for 2 to 3 times as much! I began to wonder why they never tried to compete with my prices. I know they knew about me. The sent salespeople to come “shop” my store, they called and threatened me, they left nasty voicemails on my phone in the middle of the night. If they were so mad, why didn’t they just lower their prices and steal the business away back from me, put me out of business and then go back to business as usual? I mean, these are multi-million dollar, national companies with budgets that I couldn’t even fathom! The simple answer is that they couldn’t.