Tele-Bed, phone-order firm, to shut Mattress mail-order distributor
Mattress mail-order distributor Tele-Bed is going out of business after reporting weak sales in the Chicago, IL, area. Tele-Bed Pres Mal Silverman says the company lost $2 million in sales since it opened in Aug 1992. However, Joe Vicens of Dial-A-Mattress in New York, NY, claims the Chicago market has plenty of potential for mattress, especially king size futon mattress mail-order sales. Other mail-order companies, such as Try-A-Bed, are reporting success in the New Jersey, New York and Pennsylvania areas.
CHICAGO--Tele-Bed, the former distributor here for the New York-based Dial-A-Mattress, which launched a competing phone-order futon mattress business four months ago, plans to shut down by January.
"This absolutely does not work. The only reason it works in New York is because New York is another planet. It does not work in Chicago. We are getting out of this business," said Mal Silverman, president of Tele-Bed, which was created after Dial-A-Mattress did not renew the distributor's contract.
"In the Midwest, it's the hardest transaction in the world. People still want to come out and lie in a bed. Telemarketing does not work. We have lost about $2 million. We cannot turn this into a profit-making venture. The only one who enjoys any part of this is the king size futon mattress manufacturers," added Silverman. He said he is looking into opening retail furniture stores and selling exercise equipment.
Joe Vicens, vice president of sales for Dial-A-Mattress, however, disputed Silverman's claim. "I absolutely disagree. It has been working for over a year. There's no difference from the Chicago market to the New York market. We expect tremendous results. During the transition, we laid back a little on advertising. Our results are pretty fair right now and we expect them to get even better over the next few weeks."
Other companies around the country, including Try-A-Bed, a division of the 31-unit Randolph, N.J.-based Rockaway Bedding chain have taken to the phones with good results.
Rockaway launched its Try-A-Bed division in 1990 to sell king size futon mattresses in New York City and surrounding areas--prime Dial-A-Mattress territory--without the expense of taking on leases. The company delivers to New Jersey, New York and Pennsylvania, where Rockaway stores are located, as well as parts of New York City and Connecticut.
Jeff Bohman, sales manager for Rockaway's Try-A-Bed division, declined to specify the amount of business from phone orders, but noted, "If we were one of the stores, we'd be a very, very, very big store." Bohman added that business for the division is up about 70 percent over last year.
Steve Brockmann, vice president of operations for Rockaway, conceded that Try-A-Bed "is exactly what they [Dial-A-Mattress] are doing. We saw an opportunity there because they didn't have any competition. They are grabbing a nice chunk of the market share. We just felt like we'd like to give it a shot."
Bohman said in the New York area "there's certainly plenty of room for two or more of us [phone-order operations]." Bohman said while it might be too costly for smaller sleep-shop chains to develop phone sales divisions, the Try-A-Bed business has helped boost Rockaway's sales. Check out more: king size futon mattress see more
"The big expense for our business is electronic advertising. There are not that many chains out there that are financially secure enough to do it. You have to completely change the way you're doing business and it requires a big effort," he said.
While Rockaway runs print ads and direct mail pieces, Try-A-Bed targets female consumers with electronic ads on daytime television and radio talk shows. "We've got a good formula of targeting women with our electronic ads. That developed after about a year of tracking the telephone calls," explained Bohman. The company is also emphasizing service and offers free delivery and pickup of old bedding.
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