Why Bed In a Box Companies are Doomed for Failure
Bed In a Box Companies Flirting with Disaster
If you are reading this blog then you got here naturally, without us paying Google or any other search engine to get you here. Not so with the 100 or so bed in the box companies that are flooding the internet hoping to capture a bit of the gold that’s flowing online. Online sales in this category are staggering which is why anyone who knows how to “work the internet” can get into it without much startup cost. All you need is a catchy name and something that sets you apart from someone else and viola you are in business, or are you? At least that’s the mindset of a lot of these new companies most of which do not make anything at all.
Why Most Bed in the Box Companies Don’t Even Know How to Sew
As an example, Tuft and Needle doesn’t know how to tuft or needle anything. Their mattress is certainly not tufted. They are a marketing company just like Casper and most of the rest in this category. They come up with an idea and take it to someone else to produce thus putting one more hand in the money pie. They have an eye popping website with great social media skills and have connected to a lot of folks and have sold a lot of mattress just like Casper. The one firmness fits all mentality does not really work for a very high percentage of folks which is why the return rates on these mattresses is also way above the industry norm. With these companies returns become a total loss because they never receive them back but rather have you donate them to a local charity. Sounds good but the financial loss aspect does not. So how can these companies make any money? That is a very good questions. Let’s take a look at some other staggering facts about online marketing.
Mattress Ads Everywhere You Go
Do you ever feel like Google is reading your mind because ads are popping up everywhere you go after you do a bed in the box search? I know I do but that’s not what’s happening. They are in fact tracking you based on your search habits. There is such a thing as ad tracking software and google makes a ton of money from it. Then we have the actual search results which the first 3 or 4 will always be “sponsored” ads. That means that when you click one of those Tuft and Needle, Casper, Purple, Leesa, etc. ads the company is then charged an average of $8 just to get you to their website whether you buy anything or not. Take a look below for the daily cost on google of the search terms “bed in a box” and “mattress in a box” and this is just 2 terms, the cost for searches like Memory foam mattress is even higher –
| Clicks | Impr. | Cost | CTR | Avg. CPC | Avg. Pos. | |||
| 201.76 | 3,993.74 | $1,640.07 | 5.1% | $8.13 | 1.36 | |||
| 157.79 | 4,106.26 | $1,136.93 | 3.8% | $7.21 | 1.36 | |||
| Total | 359.55 | 8,100.00 | $2,777.00 | 4.4% | ||||
As of 2-9-2017
So to be in the first 2 slots at the top of google search you can see it’s very expensive just to get someone to their website. Now look at the image below which shows the average conversion rate (those who end up purchasing the product) for that paid click
Even the very best is only 6.25% in the Ecommerce category. Now let’s do some simple math, out of 100 paid clicks at an average cost of $8 per click led to 6 sales. $800 divided by 6 = $133.34 per sale. This is all assuming the ad is pulling in at a top conversion rate. You see the average is only 1.84% in this category. Do the math on that and you can see how the cost per customer acquisition can be more that the cost of the mattress itself. This is what these companies have to do to get traffic to a new website. There is no way they can hold up to this for more than a few years before investors start asking for a return on their investments. I’m not even including the huge costs for radio and TV ads which many of these companies are also doing.
Bed In a Box Buyers Beware!
Without getting in to all the facts why these types of mattresses will not hold up very long and made to be disposable I think you can see that you are at great risk of not having anyone there if you ever have a warranty issue and need a replacement. Once the warranty issues start popping up these companies will have even more debt to deal with or face social persecution from those very same customers who once praised them. Older established companies like Arizona Premium Mattress have been online for 20 years now and do not need to acquire customers via paid search but rather rely on our customers to spread the word along with the quality of our products which speak for themselves. So in conclusion I’m just stating facts here and you can take it with a grain of salt or heed my warning, most these bed in a box companies won’t be around in 5 years and you could be stuck with what could end up being Craig’s List curb alert.
