In funeral industry, a casket price war
NEW YORK (AP) -- Even in death, a bargain is a bargain.
And this is a big one: a casket for up to 75 percent less than the
price charged by funeral homes, with delivery anywhere at any time
and a choice of 40 styles.
The deal offered by Direct Casket started after the Federal Trade
Commission told America's 23,000 funeral homes several years ago
that they had to accept caskets purchased elsewhere and couldn't
charge a handling fee for doing so.
The change has helped fuel a morbid competition, a sort of a David
vs. Goliath bout between big mortuaries and small retailers. Small
wonder: the average cost of burying someone can now top $5,000,
with the casket the single most expensive item at about half the total.
Direct Casket opened its new storefront shop Thursday in New York
City, squeezed between a dry cleaners and a pet shop. The sign on
the teal awning reads, "Caskets Sold Directly To Consumers.
1-800-73-CASKET."
Inside, shiny open coffins with price tags are visible to pedestrians
peering through the shop windows. The markup is 100 percent, but
at funeral homes it sometimes is 300 percent to 500 percent.
"I saw an ad in the paper that caught my eye -- 75 percent off. And
then, it was almost like walking into a department store, very
comfortable. It didn't keep you feeling down," said Robert Rawls,
who bought a casket in which to bury his brother.
For $1,195, he got "Going Home," a steel casket with a blue crepe
interior. It cost $1,400 less than a comparable one at the average
funeral home, Direct Casket president Ray Silvas said.
After the 1994 FTC ruling, his Van Nuys, Calif.-based company
helped break a virtual lock on casket sales by funeral directors.
Silvas' seven stores, five in California and two in New York City, are
among about 100 such businesses nationally that have changed the
way America deals with death -- at least financially.
Conglomerates have bought up many small, family-owned funeral
parlors, leaving three giants to dominate the $25 billion industry and
handle one in every five funerals.
Silvas, a 32-year-old former social worker, runs stores that sell
about 4,000 caskets and gross $3.7 million a year. He's taken the
burying business online, too, with a company Web site. [http://www.directcasket.com ] And he fills unusual orders, too.
A Nigerian diplomat recently ordered a mahogany coffin flown to
Africa for the burial of a tribal chief, he said. A woman called
to ask for one that could fit her German Shepherd. And another
customer bought a coffin for use as a wine rack.
Kelly Smith, spokesman for the Milwaukee-based National Funeral
Directors Association that represents 15,000 professionals, said that
while retail stores such as Direct Casket "give consumers another
option, we have members with prices that are competitive, too."
The nation's largest casket manufacturer, Indiana-based Bateson,
stays far away from the cut-rate business.
"We will distribute only to licensed funeral directors, and our
caskets come with a warranty," company spokesman Joe Weigel said.
At Direct Casket, prices start at $295 for a plain pine coffin used
for Orthodox Jewish rites, compared to an average funeral home cost
of $695, as priced by Direct Casket. The most expensive item is a
$3,495 bronze casket with a brush lacquer top and a tufted velvet
interior that Silvas said normally sells for at least $10,000.
The 24 coffins on display and 16 more available from a catalog are
made by six manufacturers who have asked Silvas not to release their
names. "They're afraid they'll lose business, because we're
undercutting the funeral homes," he said.
Officially at least, funeral homes are not resisting the changes. It's the law.
"But when people are grieving, it's not like buying a car. You need to
be very careful," said Terry Hemeyer, spokesman for Houston-based
Service Corp. International, one of the three industry giants.
"We have very high-quality merchandise, and with these retailers,
you don't know where they get their caskets," he said. "Besides, a lot
of people would rather have one place where they can shop." |
