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March 20, 2014

"How a Startup Created the No. 1 Rated Mattress on Amazon"

Our mattress is getting rather old, so I found this interesting. Do we want to save about 50% on a new mattress by buying one sight unseen?

Comments

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B D McCullough

Three years ago I bought an mattress on Amazon. It was the discount version of the Tempurpedic.

The brand name costs $1500. The generic costs $400. In fact, it was this mattress:
http://www.amazon.com/gp/product/B003CT37L0/ref=wms_ohs_product?ie=UTF8&psc=1

I read scores of reviews, and a good hint was: if the mattress is too hard, buy this topper for $100:
http://www.amazon.com/gp/product/B000LQD88E/ref=wms_ohs_product?ie=UTF8&psc=1

All told, $500 vs $1500. How to decide? (Especially since I can't return the mattress if I don't like it, I'll have to eat the $500.)

Let P be the probability that the discount mattress is bad. How high does P have to be so that I buying the discount is a mistake? If buying the discount is not a mistake, then I pay $500 for bedding. If it is a mistake and I have to buy the Tempurpedic (which is assumed to be good), then I have to pay $2000.

OPTION A: buy the Tempurpedic. Cost: 1500.
OPTION B: buy the discount and if it's bad, buy the Tempurpedic.


Expected Cost of OPTION B = 500 + 1500P.

The expected cost of OPTION B is less than the cost of OPTION A as long as P < 2/3.

Given the reviews, I believed the probability that the mattress would suit me was much less than 2/3, so the smart move was to buy the discount mattress.

I bought it. And the topper. I still have it and love it.

Clay

Good analysis above and in general you can go further by adding in resale recovery. Ie, if you don't like the cheap one and have the buy the expensive one anyway, you can always get some Y% of the cost of cheap back. Though used (even if only slightly) mattress sales are difficult.

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