A decade ago, my then-roommate and I bought our first mattresses in New York at the Sleepy’s that’s down the street from where the Casper headquarters is now. We lay fully clothed on a bunch of beds in front of a guy in a suit before bargaining for two mattresses at $300 each. I felt pretty good about the whole thing — until they were delivered. We lived in a six-floor walk-up, and the delivery guys stopped at the third floor and demanded $20 more per mattress for each successive floor. My roommate called me at work, panicked; neither of us had $60 to blow. “Can you just stand there with the beds until I come home from work?” I said. It was around noon. We ended up paying.

I haven’t been mattress shopping since.

I am not alone. According to Perry, most people go mattress shopping only once every eight to ten years. This makes the mattress industry relatively small compared with other consumer goods; it’s valued at around $14 billion. “People are spending more on coffee,” he says. “Only 10% of the population is buying a bed each year.”

Americans haven’t always slept on mattresses that cost as much as a month’s rent. Mattresses were fairly standard until the 1950s, when Simmons introduced bigger, more plush versions — it was the first company to sell a queen and king size, in coil-spring versions. Materials and types of beds ballooned from there, from extra-firm to pillow-top — and never forget the 1970s love affair with the waterbed. In 1991 Tempur-Pedic introduced a bed made from memory foam, the technology that makes most of the bed-in-a-box startups possible.

The mattress world is dominated by huge chains. The margins on beds are high: Depending on whom you speak to, the markup on mattresses is anywhere from four to twelve times what it costs to make them (unsurprisingly, disruptors like Casper frequently point to the higher figure). According to Bloomberg Business, last year the three largest public companies in the mattress business — Tempur-Sealy, Select Comfort, and Mattress Firm — collectively saw sales rise by 21% to $5.4 billion. Profit at the three companies also went up by 11% to $276 million. Sleepy’s is a private company that doesn’t disclose sales, but it boasts over 1,000 retail stores nationwide. “The irony of being down the street from Sleepy’s wasn’t lost on us,” Krim says.

Right now, the number of beds the startups are selling is small in comparison to the big guys. Americans buy 35 million beds a year. Perry says that if one of the mattress startups siphons off even a minimal amount of mattress shoppers, it could be a very good business: “If they became a $100 million company, that would be a huge success.”

Casper says it made $20 million in revenue between April 2014 and February of this year, including an impressive $1 million in its first 28 days. But if you break that down, assuming it comes solely from the sales of Caspers and that each bed was bought for an average of $800, that’s only about 25,000 beds. (The company has yet to release official figures for how many beds it's sold.)

I decided to return to the Sleepy’s near the Casper headquarters I’d last been in a decade ago. It was pretty much the same as I’d left it. There was a sales guy in the corner eating a late lunch with a paper towel tucked into his collar like a bib, and another named Louis who told me they were having a 50%-off sale. “The discount bonanza is the biggest of the year,” he said.

Much like the used car dealerships they’re often compared to, mattress stores are always having a sale. Both Louis and I knew this. We moved on. I tried out a few beds, going, as directed by Louis, from firm to soft ones. Confusion is baked into the business model for many mattress retailers: The bed makers rename identical products for each store to make it impossible to comparison shop. When you can’t find the same model at Sleepy’s that you can at Macy’s, how can you possibly figure out which is the better deal? Most likely the answer is you can’t — and you just buy the last one you flop on after you’re completely exhausted.

I asked about foam beds, and Louis led me to a Tempur-Pedic but told me they never go on sale. “They don’t have to,” he said. I liked the bed, so he said, “Maybe I can get them to throw in free pillows.” After a brief call to someone at Tempur-Pedic named Hector, the price was down $600, from $3,100 to $2,500. Sleepy’s salespeople work on commission — which is typical in the furniture industry. I said I’d think about it and asked for Louis’ business card. “We don’t have business cards,” he said, acknowledging that he was never going to see me again. “No one ever comes back.” He called Tempur-Pedic again. “Hector, she’s not going to take the deal,” he said. Sleepy’s declined to comment for this story, saying it doesn’t talk about competitors.



