Dying in America is expensive. The average cost of a funeral, from the flowers to the plot, has grown to $9,000. With almost 1.8 million buried every year, that amounts to a $15 billion-a-year business.
The death industry, including funeral homes, crematoriums, and cemeteries, is a tale of two economies. Most of the 19,500 funeral homes in America are small operations, passed down through families over the generations. But a few large companies, many of them publicly traded (including Wal-Mart and Amazon), control the business. Those are the firms that we studied in this analysis of the death industry.
The established death industry is under siege from two forces: cremation and the Web. First, cremation has grown in popularity, due perhaps to the rising cost of burials, public concerns about overcrowded graveyards, and personal considerations. John Ross, the executive director of the Cremations Association of North America, claims that a crematory fee is $1,400 -- a sixth the cost of an average funeral. One in three bodies are cremated, according to Bob Fells, acting CEO of the International Cemetery and Cremation Funeral Association. But he expects that number to rise to one in two by 2025. If Americans continue to move toward cremation, it could spell doom for funeral homes.
Second, death has been changed by the Internet. Wal-Mart and Amazon sell caskets online at a discount, sometimes as much as two-thirds of their retail prices. This competition drags down the price of funeral is another factor that will erode the margins of the traditional funeral industry.