How big is Amazon?

How big is Amazon in mattresses?

That’s a critical question for the mattress industry, and it’s one, sadly, that the industry is not asking. I know this from a series of off-the-record conversations that I conducted at the recent Las Vegas Market. 

I asked several industry leaders to give me their confidential assessments of Amazon’s dollar and unit volume in mattresses. The answers revealed an almost complete lack of awareness of the prominent role that Amazon plays in our industry.

“I don’t know” was a common answer. When I pressed for estimates, I received dollar estimates ranging from $500 million to $1 billion. One savvy marketing executive put the figure at $2 billion. Another gave me a range of $3 billion to $5 billion. Most of the estimates were laughably low. 

On units, the execs were largely clueless. One offered an estimate of 200 million units, which is more than eight times larger than the total U.S. mattress market.

What are the correct answers to my questions? I’ll offer some informed insights later in this column.

But first I want to underscore what I see as the industry’s shocking lack of curiosity about a major retail player. Perhaps you could make a case that retailers and manufacturers can’t worry about things they can’t control — like how big some of the online mattress retailers really are. But I would suggest that a holistic look at the industry must take into account the online marketplace.

In addition, I’ve found that far too many industry leaders simply aren’t students of the industry. They don’t dig into industry numbers. They may say that they are focused on their own business, but industry trends affect overall industry performance and can identify compelling growth opportunities. It is beyond question that Amazon identified a tremendous growth opportunity and is now dominating the market for lower-priced mattresses.

Another issue is the industry’s preoccupation — obsession? — with Mattress Firm.

The industry loves to speculate about how Mattress Firm will perform under Somnigroup ownership. Will a certain company (insert name of choice) lose slots at Mattress Firm? How can retailers compete with this newly energized retail colossus?

Those concerns are greatly misplaced, I think. Given its size and its prominence in retail markets across the country, Mattress Firm has always been on the industry’s radar screens. It’s long been fashionable to fret about Mattress Firm’s clout, but I believe that Mattress Firm will continue to be a professionally run retail chain that aims to sell better beds at competitive prices and that strives to meet the sleep needs of its diverse customer base across the United States. 

Amazon is another story altogether. Amazon is leading a commoditization of the mattress industry that is a threat to all mattress retailers — and a threat to the long-term viability of the mattress industry itself. And it is doing so while attracting little attention from the industry. Amazon’s online mattress sales are all but invisible to many in the mattress industry. Out of sight means out of mind, unfortunately.

There have been a few voices sounding the alarm about Amazon’s growth. One is Mike Magnuson, CEO of GoodBed.com, whose insights on Amazon I have always found compelling. 

Several years ago, he first argued that Amazon poses a threat that the industry must take seriously.

And over the years I’ve trained a spotlight on Amazon, noting its growing strength in the mattress category. Six years ago, when I regularly reported on retail mattress sales, I noted that analysts pegged Amazon’s mattress volume at $2 billion a year and said annual growth was running at plus 50%. “Amazon’s mattress business is booming,” my story was headlined. 

The Amazon mattress boom is continuing.

Peter Keith, an analyst with Piper Sandler whose work I’ve admired over the years, wrote an important report earlier this year in which he examined overall industry trends. In that report he tackled Amazon’s unit volume. “Our industry conversations suggest Amazon sold 8 million mattress units in 2024,” he wrote. “Based on our analysis, this would place Amazon unit share at 30%-35% for 2024.” 

The other day I asked Keith to give me his dollar estimate for Amazon’s mattress business.  

“I believe it is fair to say that Amazon dominates the under $500 marketplace for mattresses,” he responded. “So I would be surprised if Amazon’s mattress sales exceeded $4 billion (or 8 million units times $500 average selling price). $3 billion to $4 billion seems like a fair estimate to me.”

Those are some impressive numbers for Amazon. In units, it could command fully one-third of the mattress market. Its $3 billion to $4 billion in mattress sales makes Amazon a dominant retail player, one that no manufacturer or retailer can ignore.

Keith shared one other insight with me. “The quiet rise of Amazon over the last 10 years to become the industry’s dominant mattress retailer is perhaps the least reported story out there in mattress-land,” he observed. 

Look for more Amazon coverage from us in the coming months. It’s time for the industry to wake up to the realities — and challenges — of Amazon’s quiet rise to mattress prominence.