Edmonton man behind Canada’s biggest independent online mattress company
We’re all seen ads telling us we can make huge sales on the internet. Well, Edmonton’s Sam Prochazka has actually pulled this off.
Prochazka is president and CEO of GoodMorning.com, Canada’s largest independent online mattress seller. Its sales have rocketed up in recent years and were close to $40 million in 2019.
The company designs mattresses, has them manufactured in factories across Canada, folds them and bags them, then ships them out in boxes, all at prices lower than mattresses sold in regular stores.
The secrets of Prochazka’s success? A lot of it has to do with his business smarts and can-do attitude, something that were first on display when he, his twin brother Andy Prochazka and a friend were in Grade 11 at Old Scona and started up their first business, selling candy out of their own lockers.
Sam Prochazka was upset with how much the school’s own canteen was charging. “They had a monopoly and I felt their prices were extortionate.”
The team bought wholesale candy, chips and pop, brought it to school, along with ice to chill the pop, then sold it at lunch hour for far cheaper prices. “The biggest two takeaways?” Prochazka says of this formative experience. “One is that products sell … When there is a demand, you can feel empowered that you can service it. The other takeaway was: watch your margins.”
They sold their product for too little money, half as much as the school canteen charged. “A lot of work, not a lot of money,” Prochazka said. “We didn’t make a lot of profit.”
Prochazka’s father was an academic, a physiology professor at the University of Alberta, his mother a cellist. Prochazka was inspired to go into business partly from a family story. His grandfather had left Czechoslovakia for Australia, noticed no one was importing frozen fish, so slowly built a thriving import business.
After high school, Prochazka studied computer engineering at the U of A, worked in Calgary for Honeywell for a year, then again went into business with his brother, starting up a company that extracted real estate data from Multiple Listing Service records, then packaging it to real estate agents for new websites.
About 10 years ago, Prochazka was out shopping for a mattress when he had an experience reminding him of paying too much at the school canteen. He was looking for a deal on a mattress but felt he couldn’t find anything but pushy sales and high prices. “I thought surely there is an opportunity here to offer better value to customers.”
The Prochazka brothers decided to design their own mattress and sell it online. To learn about mattress construction, they cut into at least a dozen mattresses. They came up with a pilot mattress but had to go all the way to China to find a manufacturer that would build the prototype and produce the first batch.
Prochazka still has that prototype. “I sleep on No. 1 … I want to make sure it lasts …The quality is outstanding.”
Most customers like to try out a mattress before they buy it, which is seemingly an enormous disadvantage for an online company, even one selling a similar mattress at about half the cost of a retail outlet. To overcome this obstacle, they were the first online mattress company to offer customers a free trial, allowing them to try out the mattress for one month and send it back at no cost if they didn’t like it. “To be competitive online you have to eliminate the risk to the customer. Our bet was that customers would love it, but we had to compel customers to make a $1,000 bet on us.”
Prochazka says he felt there would not be many returns, partly because he’d seen a study that showed customers who bought at a store — after they had tried out many mattresses before selecting one — were just as likely to be dissatisfied as customers who bought a mattress randomly.
There is about a 25 per cent return rate for store-bought mattresses, Prochazka said. He was relieved and delighted when he found that more than 90 per cent of his customers kept their mattress after their free trial.
In the last decade, Prochazka has designed an array of mattresses at different price points, from about $400 to $1,300, all of them now produced in Canada.
What’s next? Maybe designing and selling other products online.
But job one remains battling for market share in the online mattress market. Prochazka believe his approach will win out.
“We’re the Edmonton company that can. It’s a competitive market. And we are a fierce competitor.”