Thursday, 7 November 2013
The psychology behind the mattress industry. Tilam King's Business model
"First off, these are just my understanding since birth.
I am the writer of this, and from the bottom of my heart, this is how I feel this industry works.
It is disgusting."
The objective of brands and marketing is crucial.
People remember them somewhere in their mind, but they do not need it yet.
Hence, recollection will come, when the day a consumer needs a mattress.
But the thing is, there are so many brands out there.
So many different shops out there.
and worst, there is also Expo.
One huge chunk of them which are not known, just Google and inspect their websites, you probably know what I mean. They are just sales people whom is good at sales, and specifically, mattresses.
So these people get together to rent a shop, put many brands together, and start selling mattresses.
Because they do not own the shop(they rent), they do not own lorries(they outsource), they do not own the mattresses(they consigned), they just operate it like a convenience stall.
People are buying thousands of dollars of mattresses, putting deposits, and hoping that they got a good deal and expecting deliveries to be done.
The business model seems valid, hence many people open mattress stalls everywhere.
But these people know, it is not easy to do because from March to August are basically months that are very dry.
This is the beauty of the furniture industry. If you can survive the dry periods, basically the good will come slowly and surely.
Mattress shops open and close ALL THE TIME.
The life expectancy of a shop is 2-3 years before the company closes.
That is why shopping centers are slowly dominating this industry is because, of the complications that are happening every single day.
Consumers lose faith in smaller retailers.
But remember the principle I have,
"Don't tell me you advertise full page ads and tell me you are cheaper then smaller retailers, that is basically Bull****."
Again, smaller retailers are easy to set up, the level of entrant is very low.
But I appreciate prestigious brands nowadays because they actually stop consigning to nonsense shops anymore.
Big it up to Simmons & Sealy & Tempur, they have stopped supplying to substandard retailers. Serta has all along done a different approach which is the self sustaining model, which is opening their own boutiques.
All that they had did, is really for the consumers. I really love them.
Remember these are global brands. Period.
Where as ASEAN brands, they just need to capture market share and are playing catch up, often very desperate. So long as you have a space for them, they consign. Ridiculous.
But amusing, a buddy of mine whom works for a brand, have a whopping bad credit of $100k++ just on his account. Meaning the shops either close shop, and these money cannot be retrieved back. This is just one sales man... There are a few sales man in the company.
I know I have no right to say this, because this is business.
This leads to the word ethic.
Being responsible is very important. In Singapore, the government encourages entrepreneurship, Singapore is small, hence it is actually very easy to do business.
Just that rents are crazy. Super Crazy.
The ideology behind Tilam King's business model is rock solid.
We buy the shop front property, we buy our lorries, we buy our own warehouse, and we own our own factory.
For buying of assets, is to convert fluctuating cost into fixed cost.
Hence the land lord cannot increase our rent and chase us out, or to move out to a new place and start all over.
We own our factory is to make sure our supplies QC is as high as possible and are constant, also to lower product cost from obtaining from suppliers.
The key is to make operating cost as low as possible.
No one can out do us, just because the CORE business is actually real estate.
My father once said, "Mattresses to us, is like offering people blessing. They create life there, and they spent half of the life on it. We must be able to offer them the best, if not we will not have good karma."
These are principles that Tilam King swear on.
We are a recession proof company, just because everyone needs to sleep, and we can offer better for less.
We mean what we say, and we love mattresses more then others.
No one have or will share with you insights about the mattress industry, because I feel that there need to be a change in this industry.
For too long, people have been worshiping brands, we are not a 3rd world country.
Save your money on things others can see :P
Mattress is all about the comfort point, substance, and price point.
Feel my passion, see my products.
The Perfection of Passionate Manufacturing