In 1976, Napoleon Barragan placed a classified ad in a newspaper that promised something then unheard of: home delivery of a mattress sight unseen. The day after that $18 ad ran, it generated five calls and two sales--a bonanza considering that the typical volume at Barragan's two-year-old mattress store in New York City was six sales a day.
Convinced that he was on to something, Barragan began investing 10 percent of his business's revenue in commercials on late-night TV, which cost about $30 per spot. The ads produced results--insomniacs, it turns out, buy a lot of mattresses. By 1985, Barragan had graduated to daytime TV, and in 1986 he hired Howard Stern to promote his company on air. Volume soared, leading Barragan to expand his delivery radius to 50 miles.
A willingness to experiment has continued to serve Barragan well. His company, now known as 1-800- Mattress, crossed the $100 million mark in 2004. To fend off threats from manufacturers, which are increasingly selling directly to consumers, Barragan is taking a step toward franchising. He recently struck a co-branding and revenue-sharing arrangement with Los Angeles-based Mattress Gallery, which boasts 57 locations. To make this model work, Barragan will have to learn how to manage independent-minded franchisees. He's hopeful that he still knows what makes them tick. "I still feel like I'm one of them," he says. "The only thing that has changed is the numbers."
Napoleon Barragan of 1-800-Mattress has been consistently inconsistent when it comes to building his $100 million company:
Barragan got the idea to sell mattresses by phone after he saw an ad for a company called Dial-A-Steak.