SAVE THE DATE: Sleep Summit Oct 8-11, 2024

Brooklyn Bedding’s CEO John Merwin on Being as Vertical as Possible and Building a D2C Juggernaut

Brooklyn Bedding went viral before “going viral” was thing.

A one-time Amazon ad turned into a 9-month phenomenon that made Brooklyn Bedding the household item to own.

On today’s episode, Mark Quinn and Mark Kinsley sit down with Brooklyn Bedding CEO John Merwin and discuss the early days of his entry into the mattress industry. From his brother purchasing a Wonder Bread truck and selling items door to door to John being “strong-armed” into purchasing mattress parts he didn’t need in order to get the products he wanted, Merwin is the epitome of hard work and dedication. Loaded down with parts he didn’t know what to do with, Merwin learned how to make his own mattresses and forged his way into the shippable mattress category.

FULL TRANSCRIPT

Mark Kinsley 

Brooklyn bedding helix. There are probably some other names that you haven’t heard of yet the man that connects the threads between all of them the product of southeast Montana. Mr. John Merwin, the CEO of Brooklyn bedding is on the show today that the toast Marco show begins right now. It is the DOS VARCOE show I’m Mark Kinsley. This is Mark Quinn and on the show today, Mr. John Merwin. John, welcome. Now I teed it up by saying you’re from southeast Montana. But you’re now located in Phoenix in a monster of a factory serving the mattress industry. For those who don’t know, Mr. John Merwin. Tell us about yourself. Introduce yourself to the audience.

John Merwin 

Thank you. Thanks for having me. Grew up in like you said southeast Montana, little town called Baker Montana town of 1800. Went to went to school and went to college, wrestled a couple of years in college and couldn’t make weight anymore. So decided I was going down the path of I wanted to be a teacher and a coach. And my brother is is nine years older than me and he was down in the Phoenix Phoenix area and he he started selling mattresses out of a wonderbread truck, believe it or not. And so his wife cut hair, he bought a little slow salon and quickly realised he wasn’t going to make any money, you know, running a beauty salon. And so he would go to an auction. And he would buy furniture and, and mattresses and then he put it in his garage and he’d sell it out of his garage will then go back to the auctioneer, the auctioneer took a liking to him. And he’s like, Hey, you should focus on mattresses and get you truckloads of purses. And so he kind of took his advice. And this is right when cell phones came out. So he had a bag phone in. And then he bought he wanted to get a box truck and he bought a wonder bread truck. And so he would drive around Southeast Mesa and he would place ads in the Pennysaver. And this is, you know, this is pre internet really. And, you know, he take a call on his bag phone and be like, Hey, I’m calling about your mattress. And Donnie, like, Well, where are you located? They tell him he needs to you know what, I just finished the delivery. He was always 15 to 20 minutes away. And he’s, you know, I’m 1520 minutes away, I’ll just drive over and show you what I have. And so he drive over there. And then he starts fluffing beds off on the driveway. And then they buy it and he off he goes. He go back, you know, two weeks later to the auctioneer to buy inventory. And the guy’s like, how are you selling these beds? And he took his knees like, you know, I’m driving around, you know, placing ads. And he’s like, he’s like, That’s ridiculous. You need to get a store. He’s like you need the customers coming to you. And so he took his advice and, and rent at a storefront and Mesa and he was about nine months into it. And I had just gotten engaged to my high school sweetheart up in Montana. And he called up and he’s like, What are your plans? Like I said, I wanted to be a teacher and coach. He’s like, after you get married when he moved down to Arizona and he’s like, I got this little mattress gig going on. And you know, I want to open up another store and you know, you can run a store, I’ll run a store. He’s like, you know, we’ll get we’ll get really big I think we can get to four stores. And so up and talk to my fiancee at the time. And you know, we like I said we grew up in a town of 800 people and so it sounded kind of exciting. We’re like yeah, let’s do it. And so we got married very next week. We’ve loaded up a U haul and drove down to Arizona and haven’t looked back since. So you know, how we you know, we had stores and we were liquidators, so we were buying scratching down close outs overstocks and what what it turned out what we were buying was this auctioneer had had an inside track with Montgomery Ward’s I don’t know if you guys remember Montgomery Ward’s

Mark Kinsley 

though when when remembers Montgomery Ward’s for a very special reason when you want to tell him

Mark Quinn 

well, my father was the regional VP of merchandising and then my wife John, I was 28 I walked in some government Ward I had said just started with with soda and calling on Sam’s Club is one account and the other account was Montgomery Ward’s we were selling them $32 million for the bedding. They were about to file Chapter 11. I walk into the department and there is this gorgeous blonde, younger, beautiful assistant buyer who is now my wife so I got that out of the deal,

Mark Kinsley 

then she’s another amazing product of Montana.

John Merwin 

That’s where your Hey, good people there, sorry, my light came on like shit. So that’s crazy. So that’s, that’s right when they filed chapter 11, right? Yes, exactly right. Okay, so we were we’re RNs mattress is probably four years into business, and we’re surviving off of all the as his product that we’re buying from from Montgomery.

Mark Quinn 

And there’s a lot of soda in there. So you’re welcome John,

John Merwin 

there’s tonnes of stuff. And you know, we’re so you know, they would they deliver it and they get a little scuff on it and boom, it go on the trailer, and then we would buy it for pennies on the dollar. And so when, when you’re buying, you know, this kind of goes into into the history of how we started making beds, but when you’re buying liquidated product, you don’t tell them, you know, we could never say, hey, we want you know, we want box springs, we want twins, we want foals. And so there was a segment of of our selection that we just wouldn’t get. So we went to a small local manufacturer here in town called quality bedding, and we would buy what you know, we would supplement from them. So when we would buy box springs and twins and foals and just to you know, customers come in and looking for a twin guest bed or whatever it was that we couldn’t get liquidated we buy from them. So works goes bankrupt. And they tell us, they tell us about it. And we have about six months. And I think we had at that time, we had five retail stores. And, you know, we’re, you know, my brother and I were talking and we’re like, we’ve kind of freaking out, like, what are we going to do? Where are we going to get product? How are we going to? How are we going to stay in business? And so, you know, we’re like, Well, you know, let’s go knock on the doors of, you know, let’s go knock on somebody’s door and see these doors in store. So we got you know, Phoenix has a lot of mattress factories. And so we go and we start knocking on the doors locally. And sure enough, they’re, you know, they wanted to sell their as his product. And so after words, you know, words is out of the picture. And, and we start buying, you know, as is crazy quilts, you know, whatever we can get our hands on, we want it to buy, and we start buying from see Lee and, you know, we buy a little bit from Sam and sort of never really we couldn’t crack that nut right away. And so it was C Lee and Simmons mostly but so we’re back in business, right? We’re buying liquidate product. And, and it was probably we’re probably six months into it, and you get to know the plant manager a little bit. And, you know, we’re in looking at the inventory, you know, looking at the finished goods, and over in the corner is, you know, some springs and some foam and, you know, a couple rolls a kick and, and it’s you know, it’s like, hey, what, what is all that stuff? You know, it just looks like it didn’t belong. He’s like, Oh, that’s obsolete material. It’s, you know, someone changed their specs. And you know, we kind of got stuck with them, like, what are you going to do with it? And he’s like, Well, if we can’t find anyone to buy it, we’re probably just gonna scrap it. Don’t you want for it? And you know, he’s like, I don’t know, you know, shoot me an offer on so shoot him an offer? And he’s like, Yeah, take it. Okay, great. We love it. All this stuff up on our truck we had we had a nicer truck. It wasn’t a wunderbit truck anymore. But we had a little bit nicer truck. And immediately we take this over to quality buddy, and grab the guy quality buddy. We’re like, Hey, you got to come see what we got. And open up the doors. And he’s like, Well, what he’s like, What do you want me to do with this? I’m like, I’m eight beds out of it. liquidators, we don’t care what it looks like, we will sell it, you know, we, every bed we sold was one of a kind. So we would, you know, we kind of joke about our retail stores, we would go between, you know, like a lube shop and a vape shop. You know, that’s kind of where the real estate that we were looking for, you know, big cheap, because then we would just jam it full of mattresses. So we go to quality bedding and tell them hey, you know, we got some springs here, we got some foam, we got some fabric, you know, make make, make some beds out of it. Just give me a good deal. That’s all it was about at that time was, you know, I, you know, I want to buy it for $20 I want to sell it for 100 You know, and so he looked at it and he’s like, you know, I just I don’t know how I’m going to do this. I don’t know how I’m going to charge it. He’s like, I’m not going to do it. And it’s like, okay, so we take that stuff back to our little warehouse and it’s like lost a couple 100 bucks, whatever. And, you know, two months later back and see these see these offices trying to buy some product and this time the guy goes, he goes, Hey, you see those finished goods you want over there? It’s like yeah, I said well before you suck before I sell you those. You have to buy all this stuff. And you look over there and he’s got a tonne more raw materials, excess raw materials that he wanted to get rid of. And it’s like, Man, this guy’s gonna kind of strong arm is that You know, we have to buy all of his crap before we can actually get the, you know, before we can actually get the product that we want. And, and it was then it was like, Well, you know, like, maybe let’s figure out how to how to build mattresses and so it was like, you looking around and be like, hey, you know, can you show me how to build a mattress? Like what how do you how you guys doing it? And he’s like, yeah, come over and look at this equipment. And so pretty soon we’re, you know, I’m looking at a cape edge machine, we’re looking at flange machines, quilting machines and, and, you know, you remember a couple names and, and get home and, and it was no more than probably a month later we bought our first sewing machine and and off we went. And so for the longest time, you know, we were, we were the liquidators, we, you know, in town, you know, we started getting calls from all the different factories, you know, kick and springs. And, you know, one time Seeley Seeley at one time was making their own coils. And, you know, they, they had a run of like 10,000 units that were a half inch short. And they call this up and you know, I bought him for like $5 a unit or something like that. So that we became known as the guys that would hate, you know, call these guys in Phoenix, they’ll buy anything, and they’ll pay cash. And so that, you know, we and we just kept adding retail stores. But, you know, the, the beautiful part about that was was I had my own distribution. Right. So I mean, we would just, you know, we’d get, we’d get enough fabric to build 50 beds, and you build 50 beds, and then we would send it out to our stores and trained our guys on how to sell it, and then they would sell it. And all the while we’re still buying, you know, as his product from Sealy Simmons, you know, we would buy some stuff from Bloomingdale’s, and you know, kind of kind of doing that. And it was all under the brand of RNs mattress. And so fast forward. You know, like I said, we’re, I think we’re 2025 stores and my wife was a very early ecommerce, you know, buyer and shopper and, and so one night in bed, we’re sitting there, and she’s like, Hey, look at this mattress. And she was on Overstock, and there’s, there’s this mattress in a box and memory foam, and it was pretty low price. And I’m like, well buy that thing. And she buys it. And it comes to my house. And I look at this thing. And I’m like, I mean, I was amazed, I’m like, gotta be kidding me. So I throw it in my truck, I pick it up to the factory, we open it up, and, you know, this thing comes back. And he was the first time I’d ever seen it that in the box. I’m like this is and I’m like, I want to do this, I want to figure out how to put a bed in the box. And so I started calling around and you know, I had been, I think I had gone to one is the show and you know, I started to you know, meet different people and different things like that. So I start calling around to the different guys I know, in the industry, and I’m like, Hey, we’re how do you how do you how do we get these beds. And at that time, you know, you know, sleep innovations was was definitely doing it. There were some other guys that were doing it but for the most part, you know, it was kind of important. And so I get ahold of a guy and I tell him what I’m what I want to do. And he’s like, Well do you want to go to China and he’s like, you know, we can just go to will fly to China and I’ll take you on a tour of these factories and and you know, you can build some beds and so three weeks later we’re on a plane to China. I spent two weeks in China toured a bunch of factories you know, watching these guys build beds and and it’s you know, it’s no different than what I was doing. They had an old press and but except they would press it roll it up by hand and tape it up and throw it in a box. And so I ordered two or three containers and and of mattresses I designed some mattresses there and ordered them and and brought them in and put them online I’m like alright, I’m going to sell beds online, it’s gonna be great. And I mean we didn’t sell a single bed and the whole time I’m you know, I’ve been investing all this money in equipment and mic I do not want to import you know, I want to be able to do this myself. So I kept looking around and and Leggett Leggett had just bought techno Mac or you know, had just done a partnership with techno Mac and you know, I had already bought a quilters and so you know my late like, hey, we have a middle pack machine and Italy and I’m like I want to look at it I go look at it and you know took a second on my house and and bought this rule pack machine for like 125,000 and bring it and set it up and I’m like okay, I’m gonna be able to build a bed in the box. And so I you know, built a couple different beds and and we put a bed on Amazon and you know, kind of just forgot about it and didn’t sell anything. And finally after like six months, for whatever reason, you know, the pictures were terrible, I didn’t, I didn’t know nothing about marketing. I’m not a marketing guy, you know. And so you’re pictured I took a picture in the back of the factory, and it just wasn’t good. And finally, we sell a bed. And it was like, This is great, you know, so we build it and run it through our techno Mac that was kind of just sitting there and, and put it in a box and run it down to the FedEx station, ship it and, you know, I’m driving back to the factory. I’m like, this is like, this is awesome. You know, I looked at I looked at Amazon, and, you know, this is just another retail store. You know, it’s just a, it’s an online retail store. And so, another day goes by and, you know, we sell another one, and then we sold another one. And, and pretty soon we start getting a couple of reviews and, and, you know, pretty soon it’s like, hey, are Amazon businesses is the equivalent of our best store right now. And that was after like three or four months, and like, this is great. And so, you know, we’re kind of plodding along. And we’re still RNs, mattress liquidators, and the brand I put on Amazon was Dreamfoam. bedding, I, you know, for whatever reason, I wanted a different brand and, and I get a call from someone that at Amazon, and it’s someone in their marketing department to say, hey, we’re, you know, we’ve been following following your, your store, and you guys are doing a really good job getting great reviews. And like, we’d like to do a little marketing piece on you. I said, okay, so they interviewed me, and they got a picture and they said, Now, next, next Tuesday, this piece is going to run on our mattress page, and you’re probably going to see a nice lift of business. And then after that, there’ll be a link and then it’ll, it’ll go away. Like, okay, so like, I wake up Tuesday morning to a phone call from my plant manager. And he’s like, he’s like, what’s going on? I’m like, I don’t know what he’s like. He’s like Amazon. It was 730 in the mornings, like, we’ve only had more work than we’ve ever had. I said, Well, yeah, I told you, they were gonna run this piece. They said it was gonna be you know, they said we’d get a lift and, and so I log on, I’m like, holy cow, you know, that’s crazy. Then I, like I got, I got to see where this is. So I log on to amazon.com. And on the homepage of amazon.com. Above the fold, is a picture of me in a heading that says Dreamfoam gets your bed just right. And then you could click on it, and you could read the story. And then after the story, you could click on our store, you could go to our store, and there’s our mattress. And at that time, we had one mattress. And so that day was phenomenal. And then Wednesday was pretty good. And then it just tailed off. And like they said it was gone. So next Tuesday, about seven o’clock, I get a call from my plant manager again. He’s like, hey, it’s happening again. I’m like, what he’s like Amazon. And I’m like, sure, that same ad. And, and he’s like, Well, they said, they’re only going at once, right? And I’m like, yeah, and, and I’m like, I don’t know what’s going on. He’s like, Well, maybe they made a mistake. He’s like, are you gonna call them? I’m like, hell no, I’m not gonna call them. Like, no, maybe they did make a mistake. I don’t know. And so every Tuesday for like, eight months, they ran my ad. And I never talked to anyone. You know, I, you know, I never called anyone and so it’s it, you know, every Tuesday boom, and it’s getting so busy that, you know, I can’t, I was taking the phone calls. And then I’m trying to build the beds in the factory and I’m trying to run these retail stores. And so finally, I’m like, I need to, I need to hire, you know, I need to bring a guy in to help me so I bring in a guy to, to start taking the phone calls and helping to sell beds and, and, and I’m listening to him sell a bed and he doesn’t sell a bed. So I this is like two or three weeks later, and I go into his into his office. I’m like, Hey, what happened? Like that sounded like it was you’re gonna sell it. He’s like, Well, she doesn’t you know, she doesn’t want a 12 inch bed. She wants a 10 inch memory foam bed. I’m like, okay, he’s like, Well, I’m like we got hot. We got tonnes of 10 inch memory foam beds in the back of the factory. He’s like, we don’t have any on Amazon. And we only have one bed and I’m like, well, like you call her up right now. And you tell her by the end of the day, there’ll be a 10 inch memory foam mattress on Amazon. And so I go on the back and I build one I take couple pictures and we go and I go and I I launched the launch this bed on Amazon. And sure enough he calls her back and she buys it. So it was at that point that I’m like Shoot man we need you know we needed you know we need a bigger selection so that I you know, I built a selection. I built out a line of memory foam beds I built over the line of latex beds I built out the lineup foam beds and about this time is when tough the needle comes along. Um, and Casper comes along. And you know, these guys are are selling the story of, you know, we’ve built the one bed that’s perfect for everybody. And I’m sitting there and I’m like, That’s ridiculous. I’m selling 20 beds on Amazon and I’m selling like one bed, there’s no way. And so I was kind of stubborn and just couldn’t, you know, couldn’t comprehend what they were doing. But the timing of when they came in and started doing that. I mean, it was just, I mean, it was game changing for everybody. And, you know, I sat there for, you know, you know, we were building our business on Amazon. And the whole time that I’m doing that we’re still in liquidation business and, and then they came along, and I’m like, hey, you know, we need to, we need to build a brand and, and that’s when, you know, my daughter’s my second daughter’s name is Brooklyn. And, you know, we’re kind of tossing around some different brand names. And that’s where Brooklyn bedding came from. And, and boom, there. There we went. I told you I was long winded. So John,

Mark Kinsley 

this is such a great story. There’s so much backstory to it that I knew nothing about. I’m sure a lot of people didn’t know about go back. And I want to fill in a couple of key questions. So whenever you’re talking about that first Tuesday, when the story went up on Amazon, what year was that? Because I was thinking about that in relationship to some of the single mattress, you know, mattress in the box players that started pushing the needle by around 2012. Yeah,

John Merwin 

it was it, it was like 10 2010 or 11. Right, right around there. Because it was, it was pretty, it was before tough, the needle, tough the needle started on Amazon, with like, little five inch futon. And then, you know, then kind of went went down the path that they went, but it was it was like, Can 2010 2000 And I still here, here’s the I still keep it. But I don’t know if you guys can see this. But here’s the here’s the little they sent me this after the nine months. And I’m hoping see, it was a dream from get your bed. But that was the this was the little heading. And on the homepage of Amazon above the fold. This was this was before, you know, this was before Amazon really, you know, I they were selling other things, obviously. But you know, they weren’t charging, you know, now they have Co Op fees. And I mean, to get a heading like that. I don’t know how much you would have to spend. But you know, at, at the end of that nine months, the lady called me and I said, Hey, you know, I just got to ask, you know, you guys said that you were only going to run this for one week, you know, how come? How come you kept running it? And she said, Well, you know, to be perfectly honest with you, we would always highlight authors, we would highlight, you know, authors that were that had just wrote a book and, and so we would put them on that heading. And then they would sell a book for 1499. And Amazon would take their you know, whatever cut they were getting, she said, we ran your ad. And all of a sudden we’re selling $600 mattresses, we’re selling as many $600 mattresses as we were selling, you know, $15 books. And you know, so you know, the the return on that ad there that ad placement was phenomenal for and then I kept adding skews. And so I just kept adding selection, and then it just you know, I kept I would keep track of the Amazon rankings. And you know, when, at the end of that nine months of the top 100 beds on Amazon, I had 25 of them. And in the top 100 I think I had like 12 or 13 of them. And so, you know, we were in, you know, we were doing a tremendous amount of volume, at least then to us it was a tremendous amount of volume. And we’re in this world and at that time, we’re in like, four different buildings because we’re still liquidation, you know, I’m, I’m buying different things from everyone. And, and, you know, I’m trying to, you know, I’m trying to get as, as vertical as possible. And this is, you know, I’m sorry, but this I mean, it’s a crazy long story on how we got to where we got so we you know, we would buy liquidation stuff and so then I got a call from a FX I had a facility in Phoenix and they would call and they’d be like, Hey, we have some foam. It’s a little out of spec so and so doesn’t serve it doesn’t want it you want it. Likely I want it and he’s like, okay, and I’m like, Well, you got to you got to cut it for me. He’s like, No, I’m not cutting it. He’s like, you know, if you want to buy this stuff, you got to buy bonds. I’m like, Well, I don’t know how to cut foam. And you know, he’s like, we’ll just come over here and I’ll show you how we do it. And so I go over and he brings he takes me back there and he’s like you know you got to buy horizontal saw and you got to buy a vertical size like you should be able to find them pretty Jeep, and here’s how you do it. And, and so boom, now we’re cutting foam, and, you know, start bringing in bonds, and we start cutting foam. So like, every step along the way, we would, you know, we would learn how to, you know, how to how to build beds. And, you know, that was us cutting foam. And then it was, you know, I, I’ve always, I’ve always wanted to get as vertical as possible. And so I launched, I launched a line with a with a big online retailer, and I sat down with our coil provider and said, Hey, I really want this business. You know, here’s my margins, here’s where we’re at, I need you guys to give me a good deal. They, you know, they came in and gave me what I thought was a good deal. And we’ve launched this business and boom, we take off and we’re doing well. And, you know, no more than like, two months later, they walk in the door with a 12% price increase. I’m like, Hey, I can’t do that. I just launched this programme. And I can’t do that. And I’m like, wow, there’s no, I’m like, you know, what? I want to I want to figure out how to build my own coils. And I had looked at some equipment. And so, six months later, I had some coiling equipment. And, you know, I, I took my lumps, you know, for the first couple years, I’m trying to figure it out, I bought the wrong equipment, and but I just kept at it. And so now today, you know, we we build 100% of the coils that we use, we don’t we don’t outsource that anywhere.

Mark Quinn 

Yet, now I’m going to keep going there, right? Because I want to bring this into present day. And so you’ve done so much like helix and bear and all of those things like where are you today? And like, how did you kind of like some of the more recent decisions, I’m just curious. And by the way, Kinsley isn’t his story. So interesting, because really what he just told us was, like, Amazon literally helped him get into this business, but in a really big way, he kind of helped Amazon get into the mattress business is the takeaway I got from that story, because they were learning in parallel with him. So I love that. I mean, that’s a that’s a crazy story. I love that. But anyway, back to my question. So just current day, right. So I see this theme of you seeing opportunities and jumping on them quickly and being vertical in your, in your manufacturing process, and you’re kind of connecting dots, but they’ve made some acquisitions, and you’ve grown into this very modern company. Can you talk a little bit about that, and kind of why you’ve kind of come to where you are right now.

John Merwin 

Yeah, I mean, you know, quite frankly, we, you know, we have we have our sights set on, you know, we want to be the largest DTC, you know, mattress brand mattress player out there, you know, the, the space is so large, and, you know, we’re still just just a, just a little tiny piece of it. And so when all these, when all these betting the box companies, you know, launched and they, you know, they were all over the place, and in the back of my head the whole time, I’m like, you know, there’s gonna have to be some consolidation that, you know, they’re just not going to all be able to make it, they, they built good brands that, you know, they, they’re able to sell product. But I just always felt like that there’s going to need to be, you know, a little pullback and some shrinking and so, you know, pre COVID, you know, we’re growing out of our facility. And, you know, I wanted to build this big, huge facility, I wanted to pour foam. And the coils, I wanted to put it everywhere, you know, every factory that I’ve toured outside of the US, they pour their own foam, they make their own springs, I mean, a lot of them even make their own fabric. And, and that doesn’t happen here. And I don’t get it. And so, you know, I would look at it and be like, I want to I want to control my own destiny i want you know, I want to and so, you know, you would always hear from the farmers, oh, you know, you can’t get a permit. You know, it’s, you can’t do this. You can’t do that. And so finally, you know, I’m like, You know what, I’m just going to, I’m going to try to do it and we get so long winded again. But I get you know, pre COVID I’m before COVID hits March of 2020. I am a week away from signing construction docks on this new 650,000 square foot facility pouring foam COVID heads, were kind of freaking out. You don’t know what’s gonna happen. I mean, you know, the first eight days, 10 days of the world shutting down. I mean, it was it was bad. It was bad online. It was bad retail. It was bad everywhere. Well after that 10 days and everyone was home and then they realised that the world wasn’t going to end and they were stuck at home then pretty soon or online sale. was started lifting and you know, it was it was a, it was really good for the online business. And so then I was like, You know what, let’s, we got to build this factory. And so I signed the papers and we got started on that factory. And that was, you know, you get into the, we get into the supply chain mass and you know, the coils and the nonwoven issues everyone, you know that everyone can get their hands on non woven, which is needed to make pocketed coils, and I was building my own coils at the time. And I’ve always because of my history, I’ve always been heavy, heavy inventory. And so, you know, I kind of I, you know, I saw kind of the issue with the non woven. And, you know, I’m ordering container after container non woven. And what I got into was, you know, no one had coils, why had coils, and I got a call. I know, I know, the helix guys and I sent a I sent a text off to Jerry and I said, Hey, how are things going? I imagine you guys are pretty busy. And he’s like, Oh, he’s like, we’re really busy, like, but we’re just we can’t get product. And I had a little bit of capacity. And I had coils. And so I texted back, I’m like, hey, you know, I would love an opportunity to build some beds for you, you know, I’m building my own coils, I have capacity. And you know, I could probably get you. I can’t remember I threw out a number of what I could get him on a week. And it wasn’t more than two minutes. And my phone’s ringing. And he calls me and he’s like, You have coils. McGann I’m making my own coils. And, and, and so he’s like, Well, you think you could build better? Yeah, I can build beds. And so two weeks later, three weeks later, we’re, you know, he’s in the factory, and we’re building beds and prototyping stuff. And, you know, it was probably three and a half weeks later, we’re, you know, we’re building beds for him and trying to get them out of their supply chain us. And, and I’ve known Jerry and Christian and Adam and those guys, and we’ve all you know, we see each other at market and different things like that. And, you know, how those things are you get sitting next to guys, you know, like, hey, you know, what do you think if we, you know, if there was some consolidation, or, you know, I think it’s got to happen, or, you know, it’s got this and that. And after, you know, that happened with the supply chain, and we got back up with helix, that’s when those conversations started. And then we ran a process and boom, here we are today. So you know, you know, this is this new facility is it’s a beautiful building. And my my goal, when I built it was I wanted to, you know, I said I want to build 3500 to 4000 pieces a day. And I want to sell those straight to the consumer. And, you know, I want these to be DTC. And so when you start running that map, you know, it, you know, an average unit price and 35 beds, and you start running that math, and you come to a big number, that’s a big facility. And, and so, you know, where we’re at today is, you know, that’s what we’re trying to do. But as we create, you know, the demand, you know, I think that we’re going to be able to drive traffic for week for retailers also. And we’re going to be able to put our product and into some retailers and we’re going to drive traffic for them. You know, yes, we didn’t want to sell it online. But we’re, we’re very happy selling it and someone else’s store, but let them take the customer as well. So it yeah, we’re just starting down that path. I think you’ll probably hear a lot more from us at the January market. But yeah, we’re we did the helix helix and Brooklyn bedding, you know, combined and merged. And then, you know, four months later we bought, we added on bear. So we’ve been busy, you know, integrating everything and just, you know, trying to try to learn from each other by best practices. And, and that’s that’s where we’re at today.

Mark Kinsley 

Oh, John, I some questions about the DTC space because it has been just this shape shifting beast that has become such a huge part of the industry. Clearly we’re talking to you one of the early pioneers have gotten into space, obviously, through the vehicle of Amazon and then through, you know, becoming vertical and servicing other manufacturers and building your own brands. And now, you’ve got Brooklyn bedding, and you’ve got helix as part of the family and bears part of the family and you have several retail stores in the Phoenix area. Is that right? Under the Brooklyn bedding

John Merwin 

banner. Yep. All right. Yeah, we have 16 stores in the Phoenix market.

Mark Kinsley 

Okay, so let me go I’m gonna go back in time for A minute and I want to connect the dots between something that I’ve noticed, and maybe can give us some perspective on because I think this is going to be a good insight, just in terms of where the industry is at. I remember years ago when I was at Leggett I met Jamie diamond Steen. And of course, Jamie was part of starting Lisa. And then you know, there’s Lisa, there was, tuft and needle and Casper, and then eventually purple came along. And now I don’t see in the online space, as much visibility around around brands like Lisa. And, you know, from time to time, I’ll see helix I don’t see as much bear, I talked to the people who are doing, you know, spending hundreds of millions of dollars in online advertising to get in front of the consumer to sell direct. And they’re telling me now that it’s anywhere between three and $350 to acquire a customer online? How are you approaching that space in terms of deploying ad spend? How do you show up in front of consumers, whenever somebody might be outspending? You? What does that landscape look like these days?

John Merwin 

Yeah, I would say, you know, I feel like that, it goes back to wanting to be as vertical as possible, right. And so, I don’t want to be the, I don’t want to be the cheapest guy. But I want to be the low cost provider, I feel like I feel like there isn’t anyone out there in the manufacturing space that can build a bed, you know, as cost efficiently as I can. And so what that does, is that, that gives us that gives us a little bit more margin, and we can go out and we can, you know, we can, we can afford to, to acquire that customer. And, you know, that that’s what we, you know, when we brought helix on the helix team is phenomenal. I mean, it was such a perfect combination in the sense that, you know, I, we were never, you know, very heavily marketed, driven, you know, marketing driven, and they were, you know, I was, I’m a factory guy, I love to be in the back of the factory, I love to build the product, I love to buy equipment, I mean, you come check this place out, and, you know, everything is inside of, you know, almost five years new, right? And so that that’s, that’s where I found out, we’re, you know, that’s where I’m valuable. And that’s, that’s where I need to be. And so when we combine these companies, you know, I’m still the CEO, but you know, Adam, Christian, Jerry, you know, I mentioned Tim Dilworth, my CEO, I mean, these are the guys that are running this thing, and, and they’re phenomenal marketers, you know, they’re just, they’re really good at what they do. And so, you know, I feel like, I don’t know if I answered your question, but I feel like, you know, we can we can still be profitable, and, and go out and acquire customers. And I think that that’s what’s happened, that’s why you don’t see these brands is, you know, it’s just, it’s, it’s gotten it has, I mean, it’s gotten a lot tougher to to get in front of the customer. And, you know, whether the margin isn’t there for them, or, you know, I’m not 100% Sure, but, you know, that would be my guess, you know, I used to bang heads with tough the needle here locally. And, and I, you know, I have the most utmost respect for what, what JT and he and the team that they had what they built, I mean, they would, they would just, they would just kick, they were kicking my butt. Those guys. And I, I haven’t seen JT or die for quite a while, but I would see him at market and we were cordial and everything, but I’m not kidding you. They I have to store in Phoenix, right. And there was a billboard directly above my store. And I did billboards in town. And I did billboards before they did go farms, right. But I, they the company, they would net for there was some law or something. They wouldn’t let me buy that billboard directly about my store. So tough the needle goes in and buys that billboard. And they put you know, this was with during their mattress stores are greedy, you know, by, you know, by tn.com and I’m, you know, I’m cruising to I’m going to look at one of my stores and, and I’m driving by that store and I look up and I almost wrecked my car. I’m like, these guys, are you kidding me? And

Mark Quinn 

this is a podcast, John, you can let all that go. It’s okay. Yeah.

John Merwin 

You gotta be shitting in and it turned out though, that it actually you know, at that store when we started looking at the metrics it actually it actually boosted so I think I think that you know it because it said mattress right above us and then it kind of, you know, was right down below us. But when that billboard was up, our store performed a little bit better there. So it worked. You know, in the end, it worked out. But But yeah, and you know, you know, SSB came in, bought up the needle and, you know, kind of took him down to, you know, they they kind of lost a little bit of their messaging on the whole mattress stores are greedy, and, you know, different things like that. But yeah, the, you know, I the space is, is so interesting to me and I, you know, I love I love being in it.

Mark Kinsley 

John, I think you I think you didn’t answer my question because you map it back to kind of one of your main messages, which was V as vertical as possible. And so when I was asking about how do you how do you afford to compete in that space, and obviously, how you afford to do it is yet you got to have the money. And the way that you are funding, that part of your business, which is a significant part of your business is by being vertical, by increasing your margin enough so that you can deploy that spin to get in front of the consumers. And I’m sure you know, if you’re shopping for a mattress and you go online. I mean, those are the signals that somebody sends off that you’re in the market for a mattress, so I’m sure that, you know, the marketing niches like, you know, Tim and and the helix team, and the Barents team and the Brooklyn bedding team they’re looking at in market shoppers, so it’s not going to show up to the general public. So it’s a much more surgical spend.

John Merwin 

Yes, for sure. Yep. They’re very, very sophisticated in what they do, and how they how they go after customers.

Mark Quinn 

John, I have I have one more question. And this sensitivity of time? Where do you see the industry going? Right, your brick and mortar your direct to consumer? Like, what’s your view of it? Where does this all shake out? Like, you know, balance of like, what’s being done online versus brick and mortar? what’s your what’s your, what’s your thinking there?

John Merwin 

Yeah, I’ve always felt, you know, the industry is forever, and the interest, everyone’s trying to get their get their hands around, you know, how much is being done online? And I’ve always felt that, you know, the number that they throw out there is always off 10 to 15%. You know, I think I think the number they throw out there’s always low. You know, I don’t I think everyone understands it now. But certainly four or five years ago, you know, the industry struggled to grasp how much is being done online. So, you know, but I think that, I think that, that it’s going to continue to grow. And so, you know, yeah, there’s always going to be a segment that want to shop, but, you know, we’re, we’re looking at, you know, POS, you know, like an omni channel experience that we can try to try to build and but I, you know, my wife doesn’t buy anything in a store anymore, can’t stand going in the store. My kids, I have a 20 and an 18 year old, they just don’t buy anything in the store. So you know, the really good retailers are doing a great job of creating experiences where you walk in, and, and you’re seeing great product, and you’re, you know, you’re being taken through a journey that, that they like, and so it’s, you know, I think it’s going to, you know, I think it’s going to be, it’s going to be a mix. But, you know, I, obviously the facility that we built and where we’re going, you know, we think that the online space is going to continue to grow for sure.

Mark Kinsley 

John, have you seen, I don’t know what your placement looks like at retail right now among your family of brands, but have you seen a lift in online sales within a certain radius of a store, whenever you open that store, or whenever a product is placed? So for example, right now, today, if you plop down a helix inside of a store in St. Louis, would you see a lift within a certain radius of that store with online sales? Yep.

John Merwin 

So I would say that we’re, you know, our retail footprint is so small, right? And this is when I say, you know, in January, I think you’ll you’ll definitely hear some more from us. But the the very first test we did was we put helix in the Brooklyn bedding stores. And you know, and then we started to do it, you know, a little bit of marketing. And what we found was, you know, for sure he lets was driving traffic into our retail stores. And so, you know, our sales guys loved it. And, you know, we didn’t, you know, when you look at, you know, it didn’t, you don’t feel like it’s affected our online sales at all. And in the market, we would, you know, we’re just we’re going after that, that segment of customers that want to go in and touch and feel it. So, I guess, I guess to go back to go back to your question. There’s always going to be customers that are going to go in and feel it and if they can’t go in and feel it, then they’re not going to buy your product. And so you know, we would like to We would like to expand our retail footprint. And hopefully we can do that. But yeah,

Mark Kinsley 

and one of the things that I’ve heard to kind of shift that question a little bit was, you know, whenever these online brands have made it into brick and mortar, then you know, maybe somebody’s coming into that brick and mortar store, and they, they get exposed to that brand for the first time they leave the store and then go buy it online directly from that website. And in I’ve heard numbers around like, hey, but if we put our product in a store for the first time, and like a new neighbourhood, we were seeing online sales in that neighbourhood, online sales go up by like, 30%, because there’s that first exposure effect. But people still wanted to win even. Yeah, have it shipped to their house?

John Merwin 

Well, I mean, that, you know, I mean, we all know that, that that’s not very beneficial for the retailer. Right. And so, you know, hopefully, you know, when we when we, you know, when we make this push, and if we are fortunate enough to get slotted into some retailers, floors, if that is happening, you know, I mean, we need to, you know, when we’re sitting looking at doing this, and we need our retailers to be successful. I mean, I know what it takes to run a store and the cost of the store the sales guy. And so, I mean, our hope is that that doesn’t happen if we get swatted because, you know, drive traffic into a retailer store, you know, I want that retailer to make the sale?

Mark Kinsley 

Well, John, I think I think there’s an opportunity here. Okay, so obviously, there’s a lot of opportunity in the retail space, you know, for businesses like yours. But as I go back and think about the Genesis, the origin story of Brooklyn bedding, you and your brother, what your brother is doing in Phoenix before you and your wife got married and moved down to Phoenix? I mean, he was selling beds out of a wonder bread truck, I think there’s an opportunity for a brand called wonder bed. Not wonder But

John Merwin 

hey, maybe I might actually own that website. I should check it out.

Mark Kinsley 

I’m gonna buy that.com Real quickly, right? Yeah, I wonder

John Merwin 

if you looked at my GoDaddy account and seen all the stupid website names that I own right now? You mean anything with mattress in it? I probably own it. It’s ridiculous. It,

Mark Quinn 

I’ve got a final question for you in the interest. Back to my comment about interest of time, we’ve kept you so long. But what is your like, if you look at the industry you’re in, right, and all the players and all the stuff that’s happened over time? What is your hope for this industry?

John Merwin 

Yeah, I mean, I want the good. You know, obviously, I want everyone to be successful. And there’s, you know, there’s certain brands out there that you look at them, and you’re like, you know, they they built a great brand, they’ve done a great job. And so, you know, I want those guys to be successful. And then, you know, the hope is, you know, just maybe maybe a little more transparency into the, into the product and different things like that. But yeah, I’ve gone by the model of, you know, never burned a bridge and, you know, you never know what’s going to happen in the industry. So that’s, that’s kind of we’re

Mark Kinsley 

sure as a small industry and, and a good one to be a part of. And Quinton always was trying to anchor ourselves around the idea that we were really helping people, you know, get a better night’s sleep. And this is the piece of furniture the object that you spend more time of your life on than anything else.

John Merwin 

And it’s going to give the least amount of thought to right

Mark Kinsley 

that’s right. We even did research I mean a while back and we were like, hey, out of all these eight different items we listed which one most contributes to your good night of sleep? Sadly, sleep aids were at the top mattresses at the bottom. Yeah. And we’re, I think, you know, with this direct to consumer relationship like you have with people it’s a big opportunity to shift that perspective.

Mark Quinn 

So John, as far as mattress podcasts go would you say does Marcos is at the top of your list or maybe towards the bottom? Can you get it so

John Merwin 

as far as of all the mattress podcasts out there? It’s the only one I listened to. There yet that a lot. So I would say that that

Mark Kinsley 

will take you what I heard is when you’re number one, that’s what I heard. I

Mark Quinn 

think it’s the dose Marcos Kinsley John, do you ever drink tequila?

A little bit? Not a lot. All right,

Mark Quinn 

well, when we’re together, would you indulge with Kinsley and I in a dis Marcos tequila shot?

Mark Kinsley 

One one way where you know or dose I can

John Merwin 

make I could probably handle to that cause you spread it out. Yeah. Well spread out and yeah, I I like to golf I love to golf, right. And so the guys that I that I golf with they’re they’re big tequila drinkers and one time they, you know, I’m like, you know, I think I can do that, you know, seems cool to drink tequila and, and I had a couple and I didn’t make it 18 holes. And so ever since ever since then I’ve been a little bit a little shy on the on the tequila.

Mark Kinsley 

Whenever you go golfing and you’re drinking tequila, it’s never and it’s always or you either golf or you drink. Yeah. That’s awesome. Well, hey, John, it’s great to spend some time with you. Thanks for telling your story. I know that it means a lot to people here in the industry. I do have one final question, though. Your original brand that you launched on Amazon is called the Dreamfoam. Yeah, Dreamfoam bedding Dreamfoam bedding, is that still being sold on Amazon?

John Merwin 

It is a little bit. We own dream home. bedding.com. And so that, you know, we definitely sell some product there. And a little bit on Amazon. You know, the industry is so small. So obviously word gets out pretty quickly. And once people found out and, you know, we Amazon, you know, we kind of got overtaken by all the different imports. And just it got to a point where we couldn’t compete. So, you know, the Amazon businesses, it’s still there. We do a little private label stuff. But yeah, it got got to got got tougher and tougher to compete.

Mark Kinsley 

Yeah, and that I know that some of that has been reassured ever since the anti dumping came across. So it’s, I think that part of the business, that kind of commodity or velocity price point business, I think is still kind of shaken itself out to find the home.

Yep, yep, for sure. Well, hey,

Mark Kinsley 

if people want to get connected to your get in touch, what’s the best way they can reach out?

John Merwin 

Yeah, you can. I don’t know if I want to get my phone number out. But John, John at Brooklyn. bedding.com would reach me for sure. Yeah, you know, I’d be more than happy to pick up a phone anyone that wants to talk or anyone that has any questions or wants to hear a little bit more about story. I could I could tell you stories for, you know, another hour or two hours of stuff that just happened that would you know, I mean, you’d be shaking your head at different things that kind of just fell in place. And you know, we’re been very, very fortunate and you know, made a lot of have made a lot of mistakes and bought a lot of equipment that didn’t work and but then I’ve also bought some that has worked and, and done well on the way so

Mark Kinsley 

well, hey, maybe we will take you up on that. That agreement Quinn just seal the deal on to grab a shot or two of tequila and we’ll tell some more stories about Yeah, for sure.

John Merwin 

I look forward to right.

Mark Kinsley 

John Merwin, CEO of Brooklyn bedding. John, thanks so much for being on the DOS Marco show. And wherever you’re at, hey, if you go over to fam dot news, there’s all kinds of other podcasts about 385 right now that you would need to get caught up on. So go there, check it out, be sure to subscribe. And if you want to text us or drop us a note, we’ll be happy to stick handle it to get you in touch with John, because you can text us on our podium number right there from fam dot news. And be sure to subscribe and give us a review on Apple podcasts or Spotify or wherever you get the goods. And Quinn Did I miss anything?

Mark Quinn 

You didn’t and John, man, what a great conversation. So glad we got to know you a little bit and Thanks for All you’re doing and the people you’re employing and the best to you and your company and the families that work for you and keep shining that light brothers look forward to a tequila shot with maybe a cigar and maybe a little golf together. So we’ll count the days.

John Merwin 

You you throw a tee time in there and I can make that no, you know for sure.

Mark Kinsley 

And hey, I just as long as we could pump the brakes just like two or three months here and I’m happy to come to Phoenix.

No kidding, right.

Mark Kinsley 

All right. Well have a good one. John, thanks so much for being on the show.

Thanks, guys.

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