Cost structures of mattress companies


Do you have any insights into the differences in the manufacturing process between Tempur-pedic, Serta, Sealy, and Simmons? Where they purchase their chemicals from? Whether they purchase foam slabs or manufacture the beds in house?How much it costs to purchase materials from someone like Advanced Urethane Technologies or the Carpenter Co. versus the method TPX uses? Whether Serta can manufacture and sell the iComfort at the prices they do, with the incentives they give to retailers and still turn a profit?

Thanks in advance…

Hi Hutch,

Most of the mattress manufacturers purchase foam from the foam producers and in some cases they will order custom produced foams that are variations on the foams that are available to anyone. They may also order custom fabrications of their foam such as special convolute designs, cutouts, surface modifications and others. Tempurpedic though actually produces its own memory foam and are one of the few who are vertically integrated this way (Bergad is another example of a manufacturer that does this).

The manufacturing process of each foam producer is a closely guarded “secret”. While they all use similar chemicals … purchased from the major chemical companies such as Dow, Bayer, Shell, Cargill, BASF, and many others … they all use different combinations and variations to get the many different performance properties they want in their foams. They also have to make regular adjustments for consistency and to offset changing humidity and other external variables on a regular basis so a certain foam that is poured in the winter for example may use a different formula to produce foam with the same properties in the summer.

So the foam producers such as the ones listed on the CertiPur site* buy their chemicals from the chemical companies and then with a few exceptions … the mattress manufacturers buy their foams from the foam producers.

ADMIN NOTE: *Removed 404 link|Archived Footprint: & replaced with latest CertiPUR list

This can vary between different mattress producers and they may each have different levels of “in house” production in terms of how much of the foam layers they fabricate themselves how much they source out to foam fabricators and just order the layers they need. It may also vary from model lineup to model lineup depending on the complexity and specific requirements of each type of mattress. It also depends on the type of foam and some foam such as quilting foam comes in big rolls and some comes in buns or molds.

I have no idea of costs at the chemical or foam manufacturing level. My research is more into the types and characteristics of the materials that are used in mattresses and perhaps some generic differences (such as this is more expensive than that to produce) but not into specific costs at this level. It would make sense though that TPX’s vertical integration and in house memory foam production would result in cost savings and higher margins in the same way that Sealy’s vertical integration and production of their own springs would result in similar savings. How much and the specific amounts or percentages I don’t know. You could probably get a sense of some of this by analyzing their SEC 10-K reports (for the ones that are publicly traded like Sealy and Tempurpedic) which make for some interesting reading.

They certainly can and do turn a profit at the prices they charge. There are profit margins at every step along the way from chemicals to foam to fabricator to mattress manufacturer to regional distribution systems to retail outlets to consumers.

Some quick examples of a few companies in the industry that were fairly easy to find … Sealy’s Gross profit margin is averaging in the range of 40%. Tempurpedic is running in the range of 50%. Select Comfort (manufacturer of airbeds) is running over 60%. Leggett & Platt (innerspring and components supplier) is in the range of 20%, Dow chemical is running around the 15% range.


Amazing. Thanks so much for the response.

Personally I would worry less about the cost of the chemicals and more about the amount of chemicals. Latex foam is a much better choice in all aspects of mattress components. The mattress industry is all about a numbers game and mattresses in general make more money per square foot than any other item in a furniture store. The mattress salesman is usually operating on a spiff and will only recommend the “brand of the week” depending on who’s giving him an extra incentive that week. It’s tough on consumers to know who to trust. It could be Tempurpedic this week, Icomfort next week or Sealy’s latest and greatest the next. My advice would be go factory direct for the best value. Lower overhead and higher satisfaction rates because they care more about the client.