3 Key Reasons Why Mattresses Can Cost So Much

Doug Belleville — Sat, 17 May 2008 09:57:21 +0000

Mattresses prices are expensive because much of their raw materials are derived from petroleum.
Key mattresses components have relied on polyurethane foam for decades for their comfort and padding. In days past foam was cheep and oil costs were low hovering between $10.00 and $20.00 a barrel. Mattresses prices have gone up as the increased cost of goods composed from crude oil have hit record highs. A barrel of crude oil as of 4/2/08 rose to $118.30 tripling its wholesale cost in just the last few years. In addition the industry still has not recovered from the TDI shortage after Hurricane Rita damaged the Lyondell Chemical plant, which permanently closed down production at its Lake Charles, Plant. Toluene diisocyanate (TDI) is an isocyanate used in the manufacturing of polyurethane’s deigned for flexible foam purposed. The result of the closed facility was foam allotments and increased foam prices to mattress manufactures.
Shipping the raw materials needed to make a mattress has also become more expensive. Something mattress consumers may of overlooked is that there are several points in time where the mattress will be transported by diesel trucks. Trucks operating on fuel costing at time of this deadline around $4.00 a gallon when just a couple of years ago fuel was 1/3 that price. It’s also important to understand that transporting by truck takes place throughout several different points of mattress production. It starts with the raw materials being shipped to the factory for assembly, from factory to the retailer, and from the retailer to the customer’s bedroom. Some might joke that these mattresses already have a lot of mileage on them.
Mattress costs have increased from the implementation of a mandatory mattress regulation. This mattress law is referred to as 16 CFR Part 1633 and was put in place by the Consumer Product Safety Commission (CPSC).
This new law forced many smaller manufactures to shut their doors when they were unable to comply with the required performance standards. This has resulted in fewer competitors in the mattress manufacturing industry. The governments new mattress standards were designed to limit the heat discharge during a mattress fire and save approximately 350 lives a year. The additional costs forced many of smaller mattress manufacturers out of business. With less competition giant mattress companies have greater rule over the mattress industry and are able to make more money for their investors.
Another way the new law has affected mattress prices is the forced expensive of new research and development along with mandatory prototype mattress testing at the manufacturers expense. Our high priced mattress nightmare continues for the mattress engineers. Mattress manufactures must be able to trace each mattress through the assembly process from beginning to end via a required one-mile long paper trail. Most small mattress manufactures were already working on a shoestring budget. Obvious additional work comes from 2 areas; added production complications, administrative paper work. Both necessitate more attention, time, and more maintenance resulting in higher payroll costs. Where will these costs be covered? The answer is really hard to say, because the law itself will do little if anything to generate a growth in retail mattress sales volume.
Steel costs have risen between 25 to 45 percent across the industry causing mattress prices to skyrocket.
With demand running high and supply running low it is no wander we keep seeing steel prices rising so fast. Most mattresses and box springs consist of approximately 40 percent make up from steel coil spring and border rod construction. Wholesale cost in recent days from steel suppliers has seen a jump of nearly 20%.
Three Bonus reasons
1. Labor costs have risen
2. The cost to build retail-building space has risen and associated rent payments to make the related mortgage payment of ownership. It takes a lot of square footage to display mattresses.
3. Associated Insurance Rates have increased.

In Summary:
When you add the highest Oil prices ever …
Plus the highest steel prices ever…
Plus the highest foam prices ever…

You get a high priced mattress.

What do you think about current mattress prices?

Is Financing Really Free Or Are We Just Falling For A Sales Pitch?

Doug Belleville — Sat, 10 May 2008 10:42:56 +0000

There was time when paying for something actually meant taking the cash out of your wallet. However with Free Financing being offered by so many companies it seems that the Popeye cartoon Whimpy obviously knew what he was talking about when he coined catchphrase “I’ll gladly pay you Tuesday for a hamburger today”. Maybe he saw a value in spending someone else’s money with the benefits of being able to pay for it later.

Bedroom furniture and mattress stores constantly advertise spectacular finance offers. This helps the retail furniture stores, which are typically known for more costly purchases. It helps furniture retailers make it easier for their customers to buy a pricey new oak bedroom set or a luxuriously expensive king sized pillow top mattress. Stores advertise telling us things like “ little to no money down. “No payments till January 2099” or “Just 24 easy monthly installments of 19.95”. Sure monthly payments and differed billing sound like a great option but what do they really cost you?

The answer is more than you can imagine.

Furniture stores, appliance stores, and other large item retail stores usually offer payment programs for their patrons. They know the impulses of their consumers and play on them. They want to make it easier for their shopper to get that new mattress constructed of silk and cashmere and down. So how is it done? Retailers make agreements with finance companies such as American General, House Hold Finance (HFC) and others to set up programs like…

•    Regular Revolving Credit
•    6 months same as cash / payments required
•    12 months same as cash / payments required
•    90 days same as cash / 90 days deferred payments
•    6 months same as cash / 6 months deferred payments
•    12 months same as cash / 6 months deferred payments
•    18 months deferred finance charge / 18 months = payments
•    24 months deferred finance charge / 24 months = payments

These types of payment plans to purchase house hold items are designed to make higher priced items like a new Tempurpedic memory foam mattress or a Basset bedroom set more affordable for their bargain hunter. The problem is that most of these choices in payment options cost everyone money. An agreement is set up in advance with the retailer who agrees to pay a certain fixed percentage say 6 – 8 percent based on any number of different payment options as listed above, one of which is offered to the consumer. So when a consumer decides to buy a $2000.00 bedroom suite from XYZ Company a $2000.00 the merchant has previously budgeted into the advertised “Sale Price” the additional 8 percent he needs to cover the cost he will pay to the finance company. These are the companies that will bill you for your loan.

This still is not a bad deal considering that most credit cards companies charge 8 to 18 percent and finance companies 18 – 24 percent to qualified buyers. What we all need to realize is that by paying by check or cash we could help retailers once again bring retail prices on goods down to a manageable level if everybody shopped smart. We need to remember that if a store is offering free financing, we may want to look for a competing store that offers the exact same product without free financing it could save you a lot of money. So when we see advertisements like free financing for one year or no payments for 12 months we may want to remember that if a deal sounds too good to be true it probably is.

Do you think financing is really free or do you even care? Some have told me as long as long as they don’t see it they don’t care?

StlBeds Articles and How-To's » finance

3 Key Reasons Why Mattresses Can Cost So Much

Is Financing Really Free Or Are We Just Falling For A Sales Pitch?