Average Profit Margin on a Mattress

The last time I went shopping for a mattress, I was astonished by the prices and the fact that nobody seemed to have anything in stock. There are several reasons for that shock. First, we don’t buy mattresses very often, so prices change considerably from one purchase to the next. Second, mattresses are one of our biggest major purchases and complex pieces of manufacturing.

In order to come up with the very specific design ideas, we create most designs with the assistance of state-of-the-art AI interior design software.

Before buying a mattress, you need to think about how you like to sleep and then do a lot of sampling of mattresses before you decide what to buy for yourself. I, for example, like a pillow-top sprung mattress that is fairly firm. You want to be able to make that kind of statement about your own preferences before you decide to purchase. Once you can, then you might be able to find an online bargain for the mattress you fell in love with in a high-end mattress emporium.

Add to all of these challenges the fact that nobody has anything in stock anywhere these days with the pandemic-induced shortages, especially of items with specific shipping requirements, and buying a mattress can be really challenging right now.  

This article will look at the costs and margins of making and selling a mattress to break down just what the profit margins are and how they impact your purchase.

Related To: What’s the Typical Profit Margin on Sofas?

Retail Cost of Mattress

Mattresses offer a very wide range of retail prices. The two primary reasons for this are the wide variety of mattress sellers and the vastly increased variety of mattresses themselves.

Traditional sprung mattresses, or sprung foam, are generally the least expensive, followed by foam, latex, and hybrid mattresses. There are, obviously, price ranges within those types of mattresses so that you can find a latex mattress that costs less than a particular sprung mattress, but, in general, prices follow this pattern.

Mattress Retailers

Today, you can buy a mattress at a discount house, online, in a furniture store, a mattress warehouse, or a top-of-the-line shop focusing on one product. Online retailers like Amazon let you compare a lot of mattress models quickly and will definitely help you find a low price.

However, you can’t try the mattress but can get around that with the many risk-free trial periods offered on many brands. The warehouse stores like Costco and Sam’s Club offer low prices but tend to have a limited selection and don’t make trying out the mattress easy.

On the other hand, department and furniture stores usually have a full section of mattresses, and you can try everything. Prices will be a little higher, but many of these stores now offer a price-match feature. That makes finding the lowest price on your favorite a good use of time since you can get your nearby store to match that price.

Finally, the mattress specialty store will give you a good selection but with high prices. In other words, they have higher prices but a lot of variety and expertise.

They too often have price matches, so you can get a great price if you take the time to find your best price. Within this range of stores, your prices can range from $400 to more than $10,000 for the fanciest adjustable mattresses.

Mattress Wholesalers

Even though it may seem a little scary to deal directly with a manufacturer, you can do so. You will get a much better mattress for the same dollars that you would pay a retailer.

Costs of Making a Mattress

The costs of making a mattress break down into several categories. Overall, the markup is in the 40 to 50 percent range, says Consumer Reports. Statistically, the average American spends nearly $100 per year on mattresses. Let’s look at how some of these costs contribute to the cost of your purchase.

• Labor

  Some mattresses, like a spring or spring pocket mattress, take far more labor than a form mattress, for example. However, the more expensive materials in the foam mattress will more than outweigh the labor savings. Because of nationwide labor shortages and the cost of labor, mattress manufacturers are heading more and more toward automating as much of the process of building a mattress as they can.

  In the meantime, taking a foam mattress as an example, the labor is cheap, and the foam is cheaper. The cost to make a queen-sized foam mattress is around $50 while you could make it yourself for less than $100.

• Materials

  Probably the biggest factor for a new mattress is the materials used to make it. Generally, mattresses made with springs will be the least expensive category. Hybrid mattresses with springs and foam typically cost more than all-foam models. And beds made from specialty materials, such as latex, are also more expensive than standard memory foam.

  Even all-foam beds can have a significant cost range depending on the foam used. Polyfoam is relatively inexpensive, while memory foam and truly specialized materials such as copper-infused memory foam can add a lot to the cost of a mattress.

• The fabric used to cover your mattress also affects cost, given that some of these highly designed damask fabrics can be quietly costly. Finally, the border on your mattress, whether machine or hand-stitched, can make a small but significant difference in the price. Again, foam is cheap, and you could make a foam mattress for around $100. Even a high-end mattress that will cost you $3,000 probably only has $300 worth of materials in it.

• Admin

  Someone has to organize all of this labor, material, and production. Management personnel at the manufacturers and sales outlets will contribute a small but not insignificant amount to the cost of your mattress.

• Marketing

  Any advertising done by the manufacturer (Serta sheep, anyone?) will add to the cost of a brand-name mattress. In addition, most retailers will also have ad budgets, and those costs will be reflected in the sale price of your mattress.

  In the end, mattresses are basically cheap to make. It’s when they get to the retail store that markups of 100 to 900 percent are imposed. In other words, you aren’t paying for labor or materials. You’re paying commissions to the salesperson.

• Other

  Other costs can include things like free shipping and free returns. Not only do these include the shipping costs themselves, but also the costs of administering this program.

Profit Margin

In the end, despite the range of materials and labor costs, and getting mattresses where they need to go, they have one of the best profit margins in the entire retail industry. Generally, the markup on a mattress is in the neighborhood of 900%. That is, if you paid $1000 for your mattress, it probably cost $100 to make. No wonder there are so many mattress stores!!

All in all, a mattress is one of your major home purchases and will probably last a decade or more. You want to think about what you’re buying and how to make the cost factors work in your favor before you make that purchase.  And you want to take advantage of the seller’s huge profit margin to negotiate your cost.