Supply and Demand of Iron Heart Products
-
I quote below a post by @sabergirl . I thought the subjects and points made was worthy of a thread of its own.
Per [mention]Bums_Fan [/mention] ‘s original question, I think unfortunately the marketplace sales have dropped off since way before these changes. Seems to me that the bottom has dropped out of the used IH market—used to be UHF was high demand and fetched a good price, and rare flannels would get snapped up in a heartbeat. Now things languish away for months, even after slashing prices. [mention]Clint_D [/mention] May have noticed this difference, as he has threads full of classic gear that nobody is moving on. This holds true across platforms. I usually post items first here, then on eBay and grailed. For at least the past year it feels like stuff I was sure would be quick sales I was dropping prices and bumping threads for months. Some of those things are still in the closet.
As for my personal buying habits, I check the forum, eBay and grailed daily for inexpensive Iron Heart, mostly to add to my own collection, but sometimes with an eye to re-sell and find other purchases. I don’t typically go so far as to buy things I couldn’t/wouldn’t realistically ever wear.
For a long time, we were criticised for never making our production runs large enough. Demand often far exceeded supply and people would miss out on something they really wanted. This was basically because we are crap at predicting demand. We have been trying to fix that for years, increasing the size of production runs, sometimes by very large amounts.
@Alex and I have been discussing whether we have started making too much stuff, particularly this seasons UHF's.
We would love your opinions. Should we throttle supply - something that we have never consciously done, or should we keep trying to match supply with demand?
Is the issue around depth (how deep we order a particular product) or breadth (how many products we offer)?
-
I think the demand is still there but the spare income to purchase them is not. For the last 5 or 6 years, I’ve seen trends of people making money by buying hot, desirable items such as watches, knives, sneakers and then flipping for profit or investing in new strategies such as NFT’s or cryptocurrencies and hoping for good returns. The danger in both as well as investing in general is that it’s only worth what someone else is willing to pay.
Both of those strategies are starting to soften and or fail. People overextended themselves to keep up with their neighbours and peers in ways that aren’t/weren’t sustainable.
Without a doubt we are entering a global slowdown/recession and the world has a huge problem on their hands with the Russia/Ukraine war currently going on.
The people who overestimated the markets and overextended will be the first ones to feel the full brunt of the recession. Afterwards we will all feel it in our own personal ways.
Should you slow production down is a tricky question especially when considering how many people are dependent on your production numbers. Factories, employees, resellers, and retailers.
I’m risk adverse when it comes to investing and think that the question depends on how much you’re willing to lose. If you have enough capital and/or assets (and willing to sell them), then the question is how long can you survive a recession and how long will it be.
Personally, I’m clearing any and all debt and tightening the hatches for a bumpy ride…
-
Yes Dennis made some good points. From my point of view I would assume that a small company with a good manageable collection can better react to the up and downs of the market and I think it is no fun to have a huge stock of stuff from past collections that needs to be sold with a discount. Not good for assets and reputation of the company. Keep an eye on the classics and the stuff that can be sold without being part of a collection. I personally have no problem with not getting an item because it was sold out fastly. There will be others to come.
-
I'll try to give my opinion on this, too - as there were a couple of things that did not go unnoticed.
First, some personal aspects to put my thoughts into perspective:
I arrived pretty late at the party, discovering Iron Heart only fairly recently, around the beginning of the pandemic. Still, I made a deep dive which many on here refer to as 'the rabbit hole'.
What was so convincing for me was the thought that I somehow reached the end of the road, having found something that was unparalleled in terms of quality, and - coming with that (and the price tag) - pretty exclusive. The cult-like following was an interesting aspect, too.
Also, picking up sports again led me to having to make big changes to my wardrobe, so there was a certain need to get new jeans and pants during the last few years.So, micro level first:
What I did notice, especially with the current collection, were items indeed not actually flying off the shelves. I look at the ripstop cargos still being available in most sizes, for instance.
But still, some items were instantly gone. The Fallen Acorn collab, the oiled N1. So you are able to meet the demand with some of the items.Does personal taste play a role? I certainly believe so. I find, and I'm sorry to say so, most of the current UHF butt ugly. The 335 was my take from the lineup, but that was about it. The 340 I probably would have taken if I hadn't bought a previous iteration of that design used on eBay before. I have the last two crazy check flannels from the years before, but the colours of the 336 make me cringe. Sorry.
Switching a bit more to the macro side:
In addition to the above, there's only so many things you can amass in your closet. I went from zero to about 20 (!) shirts in the span of the last three years. I switched out all of my jeans and trousers, trying to find my cut and my material. And there's only so many pants you can wear. I'm not even talking about jackets, and the 11oz cotton tops there.As you are not a fast fashion brand, but making stuff that doesn't break, you will need to take into consideration that the 'core' fans probably will, maybe even worse than me, have a quite a collection by now.
Going more macro:
The Iron Heart universe is immensely diverse, and there's so many items that are not for me, but suit others very well, the WAYWT threads certainly prove it.
But when you make stuff that lasts, that somehow puts you in the need to constantly find new buyers, and people who are new to the brand, and convince them paying bigger price tags.
Is this the point where the global situation comes into play? Probably, when people are possibly feeling a recession or inflation hitting them harder already.What I would like to know is whether or not customer interaction has ebbed off, from your point of view. I certainly have the feeling that it has gotten a lot quieter on here, but then I have not been around as long as the most of you. Does that also apply to customer inquiries on other levels, e-mails, phone calls whatever? What do the retailers say, what is their take on this? Are you able to discuss with them how other brands are selling in comparison to yours?
I'm pretty sure that we are not looking at the decline of the brand, but probably just a bump in the road, which maybe is a bump that others are experiencing, too.
-
Thank you for your thoughtful replies. I'm not saying that the brand is suffering, anything but really, October was our largest month ever, November then beat October and I would not be surprised if December beats November.
And this is in all our core metrics; the number of first-time customers, value per order, total revenue, total margin, orders per day, retailer sales etc etc.
Our year-on-year growth is quite staggering.
Obviously, we won't rest on our laurels because that is not our style. But what Ann said about the second-hand market I found very interesting, and that is really what is making me scratch my head.
Just got this as an unsolicited IG message:
Thanks for such amazing products. Your UHF colors were incredible this year. I got 3 of them lol (anniversary, green and red).
Ask 100 people for an opinion, you'll get 101 replies….
-
Personally, I like the sport of having to keep a sharp eye on new releases and snatch one up if my budget allows before they sell out. I like that some of my items are rare, and the thought that should I put them up for sale, that they'd fetch a good price. Whether or not that's true is up in the air, but the scarcity of some items gives a feeling of exclusivity.
I also like that some items are reliably in-stock. The staples. In general, when I'm ready for a new pair of 634S, it's not overly challenging to get a new pair right away.
Whatever you've been doing for the last 11 years that I've been around, is working for me. If I miss a release, I know other good ones are around the corner, or maybe I can find one used in the marketplace.
So there's my worthless opinion
-
My only thought on items staying in the market has already been mentioned. I think it comes down to disposable income in the current market. (I’m not sure if market is the right word) I don’t know much about economics but I think we have all noticed everything getting more expensive. So perhaps people who would buy from the market just don’t have that extra cash. And who knows it could be something very simple like several people at the same time have just coincidentally decided to take it easy on buying clothes for a while. I know I sort of go through phases. I’ll stay away from the IH website for a while and then all of the sudden I feel like I’m on it several times a day looking for something to buy. Just some ramblings there and nothing more.
-
Ask 100 people for an opinion, you'll get 101 replies….
true!
the restock notifications on the other hand should give a good feedback on which products could/should have a shorter restock cycle. as far as regular production items go. i'm not too good at wardrobe planning, buying things when i need them "immediately", but i found most items out of stock, at the time i wanted to buy them. for each of them i filled the notification alert and later executed on those, so maybe thats a good indicator as well as forum feedback - for instance the corduroy frenzy
-
Just thought of something else. I think some items get “influenced “ by posts on here. For instance I never ever thought I would ever wear a pair of denim overalls. But then I see the posts in here of everyone wearing them and all of the sudden I don’t know how I lived without them for 46 years. I cant be the only one that happens to and then you get a run on something that wouldn’t sell so quickly just because of a specific post.
-
I love reading these responses!!
Agree with scarcity, rarity, and exclusivity comments and how they drive sales. Look at Rolex over the last 4 or 5 years and how everyone was going nuts for them. Individuals spending 3 or 4 times msrp at grey market dealers just to own a Rolex.
If Rolex increased production or even just published their production numbers, the market would plummet when people realized there are 1000, 10000, 100000 watches just like theirs. The magic and mystery behind the brand would be gone…
I love your quote G., about predicting the future and often think about it. Let me know when you figure it out
-
[mention]Giles [/mention] yes the Filthy effect is real. It certainly got me.
[mention]goosehd [/mention] good point about Rolex. I bought one about 10 years ago now and at that time you could go into the store and negotiate the price on a brand new one. That’s exactly what I did and just basically told the store I wanted
20% off. They sold it to me so fast I thought I should have asked for more off.
I didn’t realize that things had changed until a random person told me how much I could sell it for these days. I would never sell it but it’s just strange how these things come and go. -
@deanclean I have a green submariner (ceramic bezel aka “Hulk”) that I bought just below mrsp. At that time no one wanted them and considered them ugly…About 6-8 months ago they were selling for $25-35000 and I just shook my head in disbelief.
Wasn’t going to sell it, but the thought did cross my mind.
-
I think that you would be daft not to continue to match your supply to the demand, Giles. I’m overjoyed that Iron Heart has grown and continues to be so successful.
The value of my collection is purely in the wearing of it anyway—I would be nuts to think of clothing as some sort of investment. It does seem harder to drum up buyers for classic items, but that’s not for lack of interest in purchasing Iron Heart. I think that as the brand has grown, there’s just more patterns/options out there for purchase. And like Jens said, there’s always going to be great new pieces around the corner.
Sent from my iPhone using Tapatalk
-
When I found Iron Heart, it was like finding the end game of all the type of clothing that I had been wearing since high school. Jeans, flannels, and jackets. Growing up a skate, punk, grunge type of dude that grew up to be an outdoor loving fisherman. Somehow Iron Heart flows into that seamlessly, style wise. As I’ve grown older, my appreciation for high quality has grown as well, and IH indeed became end game for high quality clothing that matched my lifelong style preference…which I now understand to be timeless, classics.
Another aspect of my personality, which I think parallels many others’ own here, is my collectors side. My motto has always been to “buy quality once.” From camera gear, to snowboarding gear, vintage stereos, records…I buy the highest quality I can afford, knowing that that is the stuff that will retain value and in turn retain demand. Add to that the notion of scarcity and exclusivity…then you’ll have yourself a fine recipe for collectivity.
While clothing, generally speaking, isn’t an investment in my eyes…and neither is my record collection (while I do have many rare records that have gone up in value over the last 7-8 years) it’s more a matter of having a collection that will retain some level of value for my own satisfaction as well as ever “needing” to sell something off….usually to fund another collection…like my growing watch curiosity. Rarity and exclusivity in collecting make for the coolest collections.
As for Iron Heart, the question of “throttling production” seems to beg the question, what is the long term plan? While I’m quite new to the game, comparatively, the menu of items and quantities have noticeably grown season by season. Scarcity is removed. Each item is increased in production size. Exclusivity is lost. I personally love the idea of seeing Iron Heart keep things like jeans and a core line of UHFs, Denim Jackets highly available. Then having some seasonal runs of special items more in the “limited” range. Being one of the lucky, diligent few to get a badass shirt or jacket makes me feel like I’m part of something special and rare. Keeps me passionate about “collecting” and also connected to the IH family.
Love this forum. Love the minds that gather here. It’s special because it’s not the whole world. Just a small ish group of people who share a shockingly broad amount of passions at a level that, in itself, shows we have reached our own personal levels of success.
-
I agree with a lot that has been said above already. I also wonder if the lack of sales on the used market has to do with people instead using those funds to purchase the newest drops of product. If sales have been really high in the last couple of months (and I'm sure the months before that) it would make sense to me.
-
I started buying IH stuff around 2016 or so. I've simply hit a point where I have more than I can wear. Also since the pandemic started my job has gone fully remote and I moved from Brooklyn to the Hudson Valley and I simply don't have many places to go to wear something.
That said I'm frothing for the brown cords.
-
I've simply hit a point where I have more than I can wear.
This is why "First Time Customer or FTC" is a key metric of ours, we know that we lose customers for all sorts of reasons, so getting new customers is vital for our growth…
-
I know that based on what you and Alex have said, Giles, that the pandemic started off as being very scary and ended up being a much more profitable year. I can't remember if IH fell under this category, but I know a lot of companies had their best years ever.
I think this was a combination of a lot of things — people being at home, having a little extra money, having a gigantic new void to fill in this weird, new way of life. Those combined with social media, limited drops, FOMO, and limited supply (sometimes just due to the market, sometimes intentionally) led to all kinds of buying frenzies and stuff selling out.
The used marked very much benefited in these times. Long before IH I've been a big music gear dweeb, and I sold all kinds of stuff on sites like Reverb for pretty exorbitant prices. It was pretty excellent for a minute there; I could buy something, check it out for a while, then sell it at a small (if any) loss, maybe even gain a bit, then put that money towards something new. The wild thing is that I wasn't even remotely charging what others were; a really nasty trend started to emerge when clearly non-musician flippers started buying up pedals, for example, not even playing and enjoying them but simply immediately turning them around at double the price. It really started to get gross, and I know that I grew more than a bit disillusioned with it all.
Where I'm going is that this boom has been followed by an obvious bust. Inflation is nuts, and people have less to spend. With respect to the used market, the shitty new tax laws that came into effect recently have made it very tough to sell things without having to deal with more pain in the ass and money loss, so I believe that's created a dip there as well. This is why I don't sell on Reverb anymore, and anything I sell anywhere I only use untaxed payment methods like PayPal friends/fam or Venmo.
I've personally reached a bit of a point as well where my collection of IH is a bit saturated and I can't wear it all. That said, there seem to be plenty of new faces on here all the time, so I very much see what Giles mentioned about the first time buyer demographic. To me it feels like the company is cruising along at a good clip. While I don't think trimming things back is a bad idea, I'm not quick to think it's necessary. Moving the needle in the other direction, however, does not seem like the move right now. We're in the middle of a economic slog at the moment, and I think everybody's feeling that at least some form of caution is the move.
