Imagine this: You won $300,000 on a scratch-off lottery ticket. When the high dies down and you realize you won’t quite be able to live like The Great Gatsby, you decide to put half the money into your savings account for a rainy day. But that still leaves you with $150,000.
Thinking of all of the things you could do with the money, you remember that it’s always been your dream to open a mattress store.
So, how do you do it? What do you need to consider? Is “location, location, location!” the only thing you need to think about?
This exact hypothetical question was posed to several mattress industry experts, and they each weighed in on what is most important to focus on.
First off, you have to understand how much $150,000 really is in the grand scheme of things. Stew Segura, co-owner of Mattress Doctor Lafayette, says 150K is way more than most people will need to start a mattress store. He puts the number at about 40-50K, accounting for rent, displays, inventory, and signage.
“I’d hold the rest,” he says. “You’re probably not going to ball out in the first year as hard as you think unless you’ve done this before and have a good mentor.”
To that point, several experts, including Gerry Wong, previously the sleep experience and bedding director at BrandSource/Mega Group Canada, added that anyone thinking about starting a mattress store should invest in a business coach. “Many independent retailers overlook the value of a business coach, or of being part of a buying group, i.e. Nationwide, BrandSource, etc.,” Wong says.
Josh Rigsby, co-owner of ESC Mattress Center, agrees with Segura about how much you need to start a store, though they both concluded that it all depends on your business model and the size of your store. Location matters, and if your rent is 10K a month, that could definitely change things.
Chris Reinkin, regional account manager at Resident Home – Nectar Mattress, previously owned mattress stores and has been in the industry for 27 years. His advice? Keep the rent low and negotiate the lease regardless of how much money you have. He also says it’s important to have four to six direct-to-consumer brands on the floor, as he feels they are the key to advertising and driving traffic.
“Before Tempur-Pedic, most stores were made up of 98% coil beds, AKA traditional mattresses,” Reinkin says. “Within seven to ten years of Tempur getting onto retailers floors, we saw a mix shift of almost 50% foam and 50% traditional coil. This was driven by nothing more than advertising. Then came the hybrid, which is still hot today.”
He also adds that you need to stay as close as you can to the top online advertisers like Mattress Firm, Sleep Number, and Ashley, and encourages retailers to focus on digital advertising.
Steve Houk, owner of Boise Mattress, is also a fan of digital advertising, and breaks down his digital numbers. “Ninety-nine percent of my business comes from Google,” he says. “It is the one place where if done properly you can easily compete with the big boys. For $2000 you can get 400 clicks, which equals 8 sales and $7500 minimum. With a better ad strategy that eight becomes 25.”
However, every store is different, and Rigsby came in with a great point: you shouldn’t count out print advertising completely.
“Newspaper is far and away our best advertiser,” Rigsby says. “Nothing else is even close.”
Reinkin did concede that in select areas print can still work well, but he holds strong that digital advertising “is the mass media of today and will only get stronger as the years go by.”
Rigsby goes on to explain his thinking behind print: “Small stores get lost in digital. You have the MFRM’s — Nectar, Purple, TSI, Sleep Number — all spending $300-500k a day on advertising; it’s hard for small stores to get seen. We stopped doing Google ads and our sales have gone up.”
Instead, Rigsby chooses the route of advertorials – advertisements that look like an article or story but talks about whatever topic you want. “We did one on latex that got us 10x ROI.”
Many people thinking about starting a mattress store might only consider the location, product mix, or advertising strategies. But as these experts show, a store has many moving parts — from the building you lease to the type of marketing you do – and you need to be laser-focused on all parts of the business in order to make the whole thing work.
So, if you had $150,000 to start a mattress store, where would you spend the money?