Profit by Knowing Bed Store’s Dirty Secrets
Among the 1,352 things that I’ve done in my life for money, selling beds happens to be one of them.
I actually didn’t do it for very long because I felt so dirty after work each day, I was tired of taking so many showers.
And you thought used car salespeople play games with their customers. They have nothing on bed salespeople.
(NOTE: I’m going to point out the problems with this industry and THEN point out the opportunity for those that feel inclined to use the bed industry’s dirty secrets against them.)
Let’s delve into the underworld that is selling beds. First, you must understand that it’s a fraternity. They all do the same things to close the sale and so they would never rat out each other. That’s why you really don’t hear about their “methods” of closing a sale.
When I was selling beds back in 1997 or thereabouts, the top salespeople were making close to $100,000 a year. Even the worse salesperson would make about $36K a year. Can you believe that? For selling beds? It’s true.
The main reason is the margins. Now, I’m all for making a profit and I really don’t even mind bed stores charging whatever the market will bear. Fine and dandy. It’s their marketing and closing practices that I don’t agree with. You see, when you walk into a bed store (just like a car dealership) they know you’ll be purchasing a bed somewhere. If you leave their store without purchasing, it means someone else is going to get your business. Statistically, if you’re “shopping” around, it means you’re going to buy at the very last store you’re “shopping” around in. It is every bedseller’s goal to make sure they are the last store on your list. Regardless whether they are actually the last one on your physical list.
They do this using all kinds of methods. I can’t remember them all since we went to a week long school to learn all of them… but I do remember some of the more popular ones. The price you see on the bed is a hyperinflated price (in most cases) and is only the starting point for the bed seller. This gives them room to drop the price but only to the level at which they sense you are biting. In order to get to these price drops, they need to have a reason to drop the price. They can’t just say, “Ah, okay, I’ll drop it by $200. Is that a good enough price for you?” As the customer, you’d be onto them. You’d think… oh, so they have plenty of room here and the price is just arbitrary, so I’m going to bleed them dry.
So, what they do is train all their salespeople on how to drop the price without letting the customer know that they are dropping it just to get to your comfortable point.
The #1 method they use to drop the price is the “last year’s cover” ploy. It goes like this, “I can see that $1200 is pretty steep for you folks. Let me check on something really quick.” The salesperson goes to the counter and pretends to be checking on something. He may be looking at his shopping list… whatever. He comes back and says, “If you don’t care what color the mattress is, I’ve got a few of last year’s models in stock for $1000 each. The only difference is the cover is a different color than the one you see here.” The customer doesn’t care what color the mattress is and the salesperson knows it. But this gives him a “reason” to drop the price without letting the customer know that’s what he’s doing. In actuality, the bed manufacturers change material all the time and there is no material pattern or color for any particular year. They just buy material and when that material is used up, they use another color… etc. They also use different colors to differentiate between stores they sell to. You see, the manufacturers are in collusion with the bed stores for the most part. Bed stores don’t want you to be able to shop for price between different stores, so the manufacturers will make the same exact bed look different by putting whatever name that store wants on that bed’s label and use a different color material. That way, you can’t go to Store A, see the price for a particular bed and then go to Store B and see if it’s cheaper. There’s no reference points between the two.
Also, each time the salesperson goes back to check on something, they are actually checking to see where they are on margin for that particular bed. They must be at a certain margin overall for all their sales. Most times, if they go below a 55% margin, they get a talking to by the owner/manager.
Another popular reason they use to test your comfortability level with the price (by dropping it again) is the mismatched box spring and mattress. This is such bunk. When the store orders beds, they don’t order by the set. They order a certain number of box springs (in varying qualities to match with varying qualities of the mattress) and a certain number of mattresses.
So, let’s say you’re still balking at $1000. The salesperson gets you as sold as he can on the $1000 so when he goes and drops it again, you think you’re getting the steal of your life and he’s got you reeled in. So, he says, “You know what… there’s one more thing I can check on… just a second.” He goes back and finishes his shopping list or checks on the margin numbers… etc. Comes back to you and says, “You know… we have an extra box spring from another bed set because someone bought just the mattress for that set. If you don’t mind the fact that the box spring’s color won’t match the mattress, I can knock off another $200.” Now you’re thinking, WOW… we’re getting a $1200 mattress set for $800. I’m sold. In most cases, all it takes is two price drops and the customer is hooked and he reels them in.
There are others… but bottom line is this… whenever a mattress salesperson drops the price on you, it’s MOST LIKELY they are doing it because they need you to buy and so they’re testing your continued resistance at lower prices. It’s not because of the reason they give you for it. The best test as to whether they are at the lowest price they can really go is if you say, “it’s just a bit too much for me. I’m going to have to think this over.” Then you leave. If they don’t block your way and offer one more drop or come out to the parking lot and offer one more drop, they are most likely at the lowest price they can go.
So, here’s an opportunity of a lifetime. Operate on the up and up. Set up a showroom that doesn’t need a salesperson to “educate” the consumer. This can be done with big placards hanging over each bed. People, now-a-days, like to help themselves. They don’t want a salesperson breathing down their neck. Put all the information they need to make a decision on big posters hanging over each bed. Have a big poster at the front of the store when they walk in that reveals how you operate and how others operate. The price you see on the mattress is our lowest price and it’s the cheapest price you’re going to find on any comparable mattress. Because we don’t employ 7 salespeople all making $70K a year. It’s all self serve. All the information you need is right at the mattress set. If you do have questions, ask the desk clerk and he can answer it.
Cutting out the highly paid con-artist (I mean, salespeople) and charging less for the goods is something the market will respond to. You could make a good living off of 30% margins and kill the competition, without much advertising at all. Plus, you could operate the store with just you and perhaps a couple other (lower paid) people.
Go one step further and make it a theme store with a restaurant or some other nifty add-on.
Use the troubles current industries have with credibility and turn those negatives around and make an opportunity out of it.