Mattress Economics
What makes one bed cost more than another?

Last updated on March 6, 2019

One of the things we are often asked about is mattress pricing and markups. Why are mattresses so expensive? How much are they marked up? What makes mattresses cost different amounts?

What is the average markup on a mattress?

A mattress seller (like any other business) will try to offer products that maximize the difference between the selling price and the cost of the goods sold (often referred to as the "markup", but technically known as the "gross margin"). Gross margin can be expressed as a dollar amount or as a ratio. This gross margin is how the seller covers their fixed operating expenses (overhead), which principally consists of staff, sales & marketing, stores and warehouses, and administrative costs.

Many people tell us that one of their greatest fears in buying a mattress is getting "ripped off." We generally tend to share this fear, which is a key part what led us to start GoodBed in the first place. When most people talk about getting ripped off, it’s a fear of paying a higher price than other people pay or failing to get the lowest price a retailer is willing to accept. It certainly doesn’t feel good to pay $1,000 for a mattress then see it on sale for half price the next day.

Former mattress-store employees, industry insiders and company financial filings tell us that gross margin on mattresses range from 40% to 75%. For example, a retailer’s cost for a given mattress might be $500. If they advertise that mattress for $2,000, then puts it on sale for half price ($1,000), they still end up with a 50% gross margin. And maybe that big half-price mattress sale got you into their store where a salesperson can sell you a higher-priced item, or additional items like foundations, mattress protectors, pillows, etc.

How do mattresses compare with other consumer products?

Average Gross Margins
Mattresses 40% to 75%
Clothing 50% to 125%
Shoes 50% to 200%
Electronics 10% to 20%
Cars 8% to 10%
Grocery items                 5% to 25%

In the end, profit is a function of margin (how much you make from each sale) and throughput (how frequently sales are made). That’s why grocery stores can survive with just 5% to 10% margins: they might not make much on each item, but they are selling a lot of volume per square foot of space in their store. Other industries rely on sales of services and extras to make up for low margins. Automotive retailers might sell you service packages or special exterior coatings. Electronics stores will want to sell you protection plans and installation services. Mattress retailers need lots of floor space for their items, and since people don’t buy mattresses nearly as often as electronics or groceries, they can’t rely on weekly or monthly purchases.

Despite consumers’ fears of getting ripped off, the profit on a given mattress is right in line with other products that don’t have any long-term associated costs. And with a little knowledge and research, consumers can make a purchase they’ll feel good about.

What makes a mattress more expensive than another?

Although mattresses look basically alike, they vary in a lot of ways that can affect the price. Some are logical – like better quality and costlier materials – but others are based on the look, which is immaterial to how it performs.

Quality of materials. The cheapest mattresses use basic polyurethane foam, steel connected coils, and polyester covers. Companies that use memory foam, latex, organic or natural materials, and pocketed coils naturally come at a higher cost. Although you usually can’t see the mattress “insides” at a store, GoodBed is a great resource to find out what’s inside a bed and how much mattress you’re getting for your money. The weight of a mattress can be a clue as to the quality of its materials. Stronger steel and higher quality foams weigh more than lower quality materials. So you could assume that a 10” pocketed coil mattress weighing 100 pounds might offer better quality and durability than a same-size bed that weighs 60 pounds.

Country of manufacture. You might be surprised to know that most mattresses are made in the United States, which means workers are paid a living wage. Relative to other types of products, it isn’t that much cheaper for a brand to make their products in China or other countries. Mattresses are large, bulky items, so transportation costs eat away at the savings from overseas manufacture. That said, the very cheapest beds sold Overstock and Amazon are often made in China or other countries that lack stringent controls on worker safety and industrial pollution.

Taller heights. From a back-support perspective, there is no reason that a 15” mattress would inherently suit your needs better than a 10” mattress. Yet taller mattresses have a more luxurious image, and because they are more expensive to make and transport, generally cost more.

Design and image. Even though you’re going to cover your mattress with sheets, pricier mattresses have prettier, more luxurious looking covers, fancier fabrics, trims, tufting, and other cosmetic details.

Social responsibility and natural materials. Inclusion of organic cotton, all-natural latex, wool padding, and other natural materials add to the price. Some brands also tout social responsibility factors, like donation of products to charities, use of recycled or renewable materials, commitment to higher staff wages, and similar policies. Examples include Leesa, which claims to donate one mattress for each ten sold.

Customization. Some retailers offer custom fabric selection, monogramming, and other options. And some can accommodate for dual comfort, where one side of the mattress has a different comfort level than the other side. You can expect to pay a premium for a dual-comfort bed.

Workmanship. Certain luxury brands tout a large degree of hand-stitching and hand-made coil units from craftsmen with decades or generations of experience in traditional techniques. Some very expensive luxury brands like Hastens and Vispring offer “bespoke” mattresses, made to your specifications only after you order it.

Innovation. Basic mattress construction has remained standard for many years, but some companies are pushing the envelope to solve problems (or perceived problems). Phase-change materials (coatings that feel cool to the touch) and gel-flecked foams aim to combat the issue of sleeping hot. Integrated electronic sleep trackers (such as those from Eight Sleep) can provide data on your sleep habits and quality. Some companies are adding minerals to their foams said to be anti-microbial. Whether these features are of use to you or not (and often, whether they work or not), they add to a mattress’s price.

Should I buy a mattress online?

Consumers’ fears of overpaying have certainly helped fuel the online mattress industry. Buy a bed from Purple or Tuft & Needle and the price online is the price you pay. There’s no obvious salesperson or middle man. Companies often tout that because they don’t have to pay salespeople or rent for a retail store, they can pass the savings along to you. But do they?

While online retailers don’t have to pay for a retail location, they still have warehouse costs, staffing costs, and administrative costs. And they have costs that a brick-and-mortar store would not have: Higher advertising costs because there’s no walk-in traffic, extra customer-service, phone, and chat support personnel, and higher delivery and return costs (since consumers cannot try a mattress first in the store, the return rate for online beds is higher).

In our analysis of mattress retail cost structures through public company filings and first-hand research, we’ve determined that buying a mattress online will tend to save you maybe 20% versus what you’d pay for a similar mattress in a store. Online retailers would certainly like you to think you’re saving a lot more. For example, Tuft & Needle’s marketing states that “We could charge $3500 but we choose not to.” However, in our assessment, the Tuft & Needle mattress, made of polyurethane foam, would not be worth $3500 from any retailer (we do think it is a good value at its $600 price tag).

The downsides to buying online are obvious: You can’t try the bed before you buy it, and by buying online, you lose the ability to negotiate a lower price.

Are expensive mattresses worth the money?

As with anything else, the concept of "value" for the money is largely subjective.  Let's take cars as an analog. Is a Corvette worth 5x more than a Chevy Malibu? 

One person would argue that first and foremost they are both cars, so will both get you from Point A to Point B.  They would then add (correctly) that there is no way that the Corvette will last 5x longer, keep you 5x safer, get you places 5x faster, or otherwise demonstrate 5x more value on any metric.  They would thus conclude that it must not be worth 5x more, and that anyone who buys a Corvette is getting ripped off.

Another person would argue that although they are both cars, they are in a completely different class. They would explain (correctly) that Corvette uses more expensive components and manufacturing processes that are designed to create a more exciting driving experience. They would thus conclude that if you can afford a Corvette, and driving one makes you feel better, then it is worth the extra money.

Of course, both of these people would be right...  Mattresses are no different.  In buying a more expensive mattress, you are getting better materials, more innovative features (like cooling features, zoned support, dual comfort), and a taller, nicer looking bed, but not necessarily vastly better support and longer durability.

Up to about $1500, we believe you do get meaningful increases in quality, performance, and durability—appreciable increases in quality and workmanship that should meet all of your basic needs for spinal alignment and pressure relief. Beyond that, you’re paying for more things that meet your specific needs, preferences, and priorities, along with convenience features and innovation that may appeal to you like cooling features, an extra-tall bed, natural or organic materials, specific edge-support or motion isolation innovations, etc.

How much should you pay for a good mattress?

In our experience, most consumers can find a well-made mattress that fits their basic needs in the $1,000 to $1,500 range (queen size). In this price range (from a reputable retailer and brand), you are getting good quality construction, reliable materials, some upgraded comfort materials, and a nice-looking and well-made cover.

The best place to start is our Mattress Match Quiz, which analyzes your personal needs and preferences to give you a list of mattresses in your price range that will best suit your particular needs.

The question of where and how you buy your new bed comes down to your comfort level with negotiation, and the amount of research you are able or willing to do to get the most for your money.

  • Negotiate at a mattress store. You’ll need to come loaded with as much information, and a good understanding of mattress materials and features to get the best price. Catching a “50% off” sale will save you from having to haggle too much. Here’s how to compare mattress stores.
  • Go for a MAP model. Some brands set a “minimum advertised price” for its beds and require that retailers not sell that mattress for less that the MAP price. This is similar to Apple smartphones, where there’s little variation in pricing since Apple has strict requirements for retailers on pricing. Read more on MAP pricing and models.
  • Buy online. Buying online saves you from having to negotiate or even deal with a salesperson. But unless you buy from a brand that also has local showrooms, you won’t be able to try it before you buy it.

What’s the best month to buy a mattress?

We typically see the best sales on mattresses around certain holidays throughout the year. There is no one “best” month, but rather several:

  • February: President’s Day
  • May: Memorial Day
  • July: Independence Day
  • September: Labor Day
  • November: Black Friday
  • December: After Christmas

We also see sales (but typically not as aggressive or deep discounting) around some other holidays including Martin Luther King Jr. Day, Mother’s Day, Father’s Day, Veterans Day, and Indigenous Peoples’ Day.

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