Are small aggressive retailers cutting great deals with smaller manufactures creating less profits for the 4 big manufactures? The Sheets are pulled back on an industry that has been focused on creating confusion to try to fool the consumer.

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-- Olathe, Kansas - July 14, 2012 - Increased competition not just in the United States but worldwide may be the cause of the 75% drop in value of Tempur-pedic stock. Small retailers that are negotiating aggressive agreements with smaller manufacturers who produce their products overseas are significantly affecting the “Big Four’s” bottom line. “It's a new day for the mattress industry. With aggressive rivals coming in, Tempur-Pedic and other big names can't afford to be sleepy. And their margins may never be the same again” (MSN 6/6/2012)One of these very aggressive companies is Bedmax mattress store. Bedmax was founded only 12 months ago, but its growth is astounding, as they are opening locations nationwide on a monthly basis. What is the cause of their success? Founder Brett Blackman says “ Well, we asked the big question that everyone should ask, “Why?” Why is the mattress industry being done this way? Is this the best way to do it? We have found in the past that sometimes the current way is the most effective way, but sometimes the status quo exists only because no one has made the hard decisions to reduce cost and focus on innovation. They just became fat and stagnant --Don’t rock the boat!”Bedmax claims 3 main innovative ideas which contribute to their success:First, the average furniture store has 25,000 Sqft (Furniture Today) with an average rent of $25,000 per month. All Bedmax mattress and furniture stores are in a low cost and clean area with a much smaller showroom. This allows Bedmax to reduce their overhead by over 95%, passing the savings directly to the consumer.Second, the furniture industry is an aging industry with less than ⅓ of furniture and mattress companies marketing online (Furniture Today). Bedmax has developed a proprietary online marketing system that focuses on several innovative online marketing techniques. “15 years ago if you wanted to go and purchase a mattress you went to nearest mattress store and spoke to a sales person to get your information, because they were the expert. Those days are over! The new expert is Google and consumers are becoming educated on what they want before they ever show up at the mattress store. It is no longer an impulse buy, there is no need to be on the most expensive real estate in the city. It is now an educated, researched purchase and consumers are willing to drive 10 minutes further to save hundreds, sometimes thousands of dollars for the exact same mattress or furniture that they could buy at an overpriced traditional retailer”, said Brett Blackman.Third, the quality and the cost of the product is their most important focus. Bedmax feels that as technology changes it provides opportunity to keep cost down. Bedmax contracts with both international and domestic manufacturers to make their products as they focus on keeping expenses low. When a company like Tempur-pedic spends over 30% on their “Selling General and Administrative”(400 million annually) (Yahoo Finance) , people forget that the $400 million expense is reflected in the cost of the new mattress. In addition, they have to make a profit of 25-30% to keep their stockholders happy, so there is already a 40-60% mark-up on the mattress by the time it is sold to retailers. The retailer then runs expensive traditional marketing such as Sunday newspaper ads, TV and radio commercials to get people to just walk in their door--costing as much as 25% ($100 - $300 per customer) of the retailer’s cost of the mattress. Take into account that the traditional retailer has very expensive overhead and high paid sales people (commissions as high as 30%) and by the time the mattress store sell’s the mattress it is marked up on average 200% - 300% because of inefficient business processes. Bedmax asked again, “Why?Why not supply a mattress at only 30-50% markup allowing enough margin to cover overhead, marketing, and profits? Educate the consumer directly through online marketing (organic is free) and then sell the bed at a much lower price creating a win-win situation.”About Bed-max.com:Bed-Max.com is a registered Trademark owned by Midwest Mattress Dealer, LLC, one of the fastest growing mattress and furniture providers in the United States. Bedmax provides high quality on-demand mattresses and furniture by leading manufacturers. Bedmax has opened 8 locations in 3 months and is expanding at the rate of 3 locations per month. They expect to have 30 locations open and operating before the end of the 2012. Their goal is to have over 600 locations nationwide within 6 years.