[kindmatt]

I would respectfully disagree that the cost to mfg. a mattress is drastically different.

Your pricing is completely off. You can buy organic cotton fabric for as low as $6 that is 100% organic cotton certified by GOTS and you buy can knit fabrics for $12. It isn't that simple of a comparison. If you were in manufacturing, you would know, but it is easier to come up with a marketing gimmick. Tuft and Needle buys from a manufacturer and resells it just like Sit 'n Sleep, Mattress Firm, Sleepy's, etc.

Why do you say “about 2 pounds” as the density? This sounds like cop out. You are probably using 1.8 and some 2 pound. Be open and honest so people can make an educated buying decision.

You don't agree that those are good comps. How about these? A queen Ikea is $329 for 2.2 pound foam and a ½” thicker. (http://www.ikea.com/us/en/catalog/products/00139813/) Where Tuft and Needle is $399 for a supposedly 2 pound foam. Surprisingly, most IKEA mattresses are made in the US so don’t give the made in China routine on this.

Serta at Sleepy's is $299.99 (http://www.sleepys.com/en/Sertapedic-Caine-Firm-Mattress_109...). Even if they were using a lower density, how could they be marking this 1,000% as Tuft and Needle states. Sealy has one that is 5 ¾” thick for $299.99 at Sleepy’s (http://www.sleepys.com/en/Sealy-Austin-Creek-Plush-Mattress_...).

Why is Tuft and Needle $100 more than the name brands which are made in the USA, too? Don’t give me the density because like Sealy and Serta, Tuft and Needle won’t disclose density. For sake of argument, let’s say Sealy uses a 1.2 pound and Tuft and Needle uses 2 pound foam. There is 200 board feet in a queen mattress and the cost per board foot between 1.2 and 2 pound is 25 cents. The added cost would be $50 in raw material.

This is untrue; “Tuft & Needle was founded to offer boutique-quality beds at a fraction of the cost. You shouldn't have to overpay for a good night's sleep.” Tuft and Needle is nowhere close to a boutique bed.

Finally, prove to me that mattress stores markup the mattresses 500%. If you look at Mattress Firm's 10K Report, you will see that there GM is nowhere near that. In 2012, they had sales of $1,007,337,000 with a COGS of 614,572,000. That is a 64% markup. No, sales and marketing are not included in this. They spent 245,555,000 on sales and marketing. Tuft and Needle needs to get the facts straight.

[johmas]

Kindmatt, thanks for the reply. There are many points here and I'll do my best to address your concerns below.

> Your pricing is completely off. You can buy organic cotton fabric for as low as $6 that is 100% organic cotton certified by GOTS and you buy can knit fabrics for $12.

I wouldn't disagree with you about being able to get it for $6 or even for nearly free when a fabric supplier has material they are getting rid of. There are varying attributes that makeup a cost other than just raw material. The numbers I was using was based on averages found in research we collected from suppliers' prices within the USA.

> Tuft and Needle buys from a manufacturer and resells it just like Sit 'n Sleep, Mattress Firm, Sleepy's, etc.

We are the manufacturer of the mattress, so the comparison to other resellers is quite misleading. With that being said, we certainly have partnered with 3rd party suppliers for the individual ingredients. As an example, we don't have our own foam pouring machines or fabric knitting machines yet.

> Why do you say “about 2 pounds” as the density? This sounds like cop out. You are probably using 1.8 and some 2 pound. Be open and honest so people can make an educated buying decision.

I'm being honest with you when stating our foam is "about 2lbs." The reason I say "about" is because foam in general has a slight variance, it's never exact. It's not abnormal for foam to be .1% more or less dense but, on average, ours is 2lbs. We don't hide that fact from competitors. For skeptics we encourage them to purchase and test the foam with lab equipment.

> You don't agree that those are good comps. How about these? A queen Ikea is $329 for 2.2 pound foam and a ½” thicker. (http://www.ikea.com/us/en/catalog/products/00139813/) Where Tuft and Needle is $399 for a supposedly 2 pound foam. Surprisingly, most IKEA mattresses are made in the US so don’t give the made in China routine on this.

That is definitely a better comparison. Our intention is not to undercut Ikea prices and even if we tried it probably would not be possible for a while. They are a mega billion dollar company and can leverage their economy of scale. We respect them for their pricing and what we offer our customers is a different experience than simply price alone.

> Serta at Sleepy's is $299.99. Even if they were using a lower density, how could they be marking this 1,000% as Tuft and Needle states. Sealy has one that is 5 ¾” thick for $299.99 at Sleepy’s

The markup certainly depends on which product you're talking about and which retailer is selling it. If that specific Serta mattress is actually priced in a more fair manner, that would be great. There are also other smaller companies taking a similar approach as we are, which we are really excited to see. Mattress Underground has done a pretty good job of discussing companies like this.

> Why is Tuft and Needle $100 more than the name brands which are made in the USA, too? Don’t give me the density because like Sealy and Serta, Tuft and Needle won’t disclose density. For sake of argument, let’s say Sealy uses a 1.2 pound and Tuft and Needle uses 2 pound foam. There is 200 board feet in a queen mattress and the cost per board foot between 1.2 and 2 pound is 25 cents. The added cost would be $50 in raw material.

We do disclose our density but will not disclose the other specs you're wanting because those are our secret sauce. You're giving some examples of foam board foot costs but to be fair, not all foam is priced on its density. A 1.2 pound foam, as you say, may cost 25 cents but if you pour with a different ILD, compression modulas, different chemical makeup, dye, or other attributes of many, it will certainly affect the cost. It isn't black and white. This is why you find quite a few foam companies inventing new mixtures and formulas and charging different amounts for the same density. Our foam makeup is unique.

> This is untrue; “Tuft & Needle was founded to offer boutique-quality beds at a fraction of the cost. You shouldn't have to overpay for a good night's sleep.” Tuft and Needle is nowhere close to a boutique bed.

Boutique is certainly a subjective term. For some clarity as to why we use that word, we're a small team and we're offering something, that we believe, is specialised.

> Finally, prove to me that mattress stores markup the mattresses 500%. If you look at Mattress Firm's 10K Report, you will see that there GM is nowhere near that. In 2012, they had sales of $1,007,337,000 with a COGS of 614,572,000. That is a 64% markup. No, sales and marketing are not included in this. They spent 245,555,000 on sales and marketing. Tuft and Needle needs to get the facts straight.

The 500% statement I made above was based on the product you linked. I explained how I arrived at that number above. But as far as Mattress Firm, we never singled that company out or have ever looked into them. I don't know what their markup is but it's certainly an interesting question.

I see you just made a fresh HN account and are not exposing your identity in the profile. If you'd like to have a deeper conversation it'd be great to jump on a call or meet face to face if you'd like. I'd even be willing to show you around our facility if you're in the area.

[kindmatt]

I’m new to HN, but I don’t think that this takes away from the points that I’m making. I think that this conversation is best held in a public forum so people can know the truth rather than sweeping it under the rug.

It sounds like you are using the top end of the tolerance of the foam when you say “about.’ Everyone else in the industry uses the target density. If you want to be totally transparent, give the range of the density like I’ve seen when people talk about ILD or give the target density like everyone else so that people can fairly compare Tuft and Needle’s mattress. Using the word “about” makes you sound like you are trying to be sneaky.

Even though IKEA is a huge multinational company, they don’t manufacture the products. A true mattress manufacturer would be able to overcome their volume discounts and offer a product for the same price as or less than IKEA. The Mattress Underground has a list of true manufacturers who I’m sure can easily produce something for less than or at the same price as IKEA. Fox, Flexus, and Buis are just a few of examples of the real deal. These are true manufacturers!

You are not very knowledgeable in the mattress industry. Most manufacturers don’t own knitting machines and equipment to pour foam. The three largest manufacturers in the US don’t even own them. Tempurpedic buys foam from another manufacturer with the exception of their memory foam. Sealy, Serta, and Simmons buy their fabric from a weaver and foam from other manufacturers. Mattress manufacturers quilt, cut, sew, and assemble the mattress.

Technically you are a contract manufacturer. You’ve found a factory in California to make the mattress for you. Just like Apple doesn’t manufacture the IPhone, you don’t make the mattress. Matt Firm, Sit n Sleep, Sleepy’s and others do the same thing for their private label. Tuft and Needle doesn’t lease or own a manufacturer facility nor do they own a quilting machine, sewing machines, tape edge machine, etc. You are very slick. To prove my point, if you are truly a manufacturer, does Tuft and Needle own or lease a factory where it only produces product for itself and their customers? And, do you have the equipment, like sewing machines, on your balance sheet that you depreciate on a yearly basis? Just be honest and try not to twist the truth. This is problem with the mattress industry.

On Tuft and Needle’s website, it states the typically markup is 1,000%. The reason that I gave the Matt Firm example is they are largest mattress retailer in the US and the only publicly traded one so we absolutely know their markup. All the other top twenty mattress retailers operate in this manner. That type of markup is atypical. I’d bet you’d be hard press to find one with a 1,000% markup that isn’t based on some myth. Consumer Reports, http://www.consumerreports.org/cro/magazine-archive/2010/may..., even mentions that the average gross margin is around 30 to 40% which at most is a 67% markup. On the high end, which Tuft and Needle’s is not based on the comparable from IKEA and others, the markup is 100%. If you were using memory foam or latex, your argument may be more valid, but even a high density foam mattress is considered a low end mattress.

Show me one overpriced 5” foam mattress? If you are offering factory direct prices, I should be able to find one similar to Tuft and Needle for $800 in a queen given a 100% markup and that Tuft and Needle is selling the mattress to us at the same price that a manufacturer sells it to a retailer. Please don’t tell me that you sell at lower margins than retailers pay for a mattress from the big brands, who have enormous buying power that would offset your lower margins as you have previous stated in the IKEA example. At Sears, you can get a 12” gel memory foam bed on sale for $594 which is significantly higher quality than a 5” high density foam mattress. http://www.sears.com/sealy-fergus-falls-ti2-ii-ultra-firm-qu... I could go on with examples proving my point.

Tuft and Needle may offer a different shopping experience, but I think that it is mistruth to talk about the money that customer saves when he/she can buy product of similar quality and durability at a local big chain mattress retailer.

You can be a good company selling a mattress made for you. Just don’t be dishonest and twist the truth like the rest of your brethren in your industry. It is a disservice to the true small independent manufacturers.