Supply and Demand of Iron Heart Products
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Just another thought…
Let's say that your current UHF margins are based upon a certain volume moving through the entire process. If you reduce the volume ordered, will it significantly affect those margins and ultimately price them out of market or reduce the margins to a point that they are not profitable to make?Makes no difference to margins, but it does make a difference to Mr Heavy Nell. And that is more important than short-term margin….
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This is such a complex issue with points that are well outside of my consideration, but I can give some perspective as a buyer and at times re-seller
I only sell my items when they are just sitting in my closet and don't have a great fit for me or I'm not in love with the pattern. I've been around since 2016 here and at this point, like many long(er)-term IH'ers, I have more items than I can wear but that doesn't mean I move them all. For instance, I have all the colorways of the IHSH 127 V2 UHFs. I think I wore each color once last season and I may wear each a couple times this season, but I'm not ready to move them because of the fit and the classic buffalo check pattern in amazing colors. They are classics and I will like hold on to those indefinitely. That said, I moved three UHFs from the 2020 FW season just last spring. As mentioned, these were moved due to lack of wear as a result of fit and pattern. It was funny cause when I moved those last spring, I did a clean out and had a lot of UHF and some other non-UHF classic shirts all in XXL or XXXL. I hadn't posted in the marketplace since 2018 (my go to for first dibs on my IH sales), but back in 2018, I had a similar sale of lots of shirts in XXL or XXXL and they all were gone off the forum in like a week.
My sale thread from this year - I think I sold one shirt here and the rest went to eBay. I had no idea why but chalked it up to the pandemic, time of year, sizing, etc.
But Anne's point is making me think…...that said, I saw another member had a massive classic shirt sale for items in the XXL and XXXL range and I talked to him when I bought a few shirts and he said his stuff was gone within like 2 weeks and he had ALOT!
anyways, interesting reselling points I'm reading.
In terms of throttling, its so hard from a customer stand point. Like go ahead a throttle the items I don't want, but make sure if there is something I do there is enough for me to buy it haha.....I remember the days when the UHFs would sell out in your size in like 10 minutes and if you were a couple minutes logging in, had connectivity issues, issues with the IH website (seems to be no longer and issue), or anything that delayed your checkout process and youd miss out on an item you've been drooling over all season.
If its just for the sake of exclusivity, like I get wanting to have something that no one else does, but come on. In the big picture, how many people do you know in your physical proximity that wear IH (doesn't count if you live in Gosport
)? IH in and of itself already has that "exclusivity" factor built in. And I can tell you its a bummer to lay all the work to make sure you can be ready to add an item to your cart and pay at 16:00pm Gosport Time just to have an uncontrollable delay cause you to miss it.I remember when they were releasing a shirt and it was set to release 5 minutes before I had a scheduled flight take off. I was lucky enough to make that purchase cause when I landed it was sold out.
All that said, I can see doing a "throttling" for sustainability and business reasons, but I feel like you can really displease some of those first time customers (especially those who are not used to the IH culture and release/purchase process) if they have identified an item they love. Spent time researching and contributing to the forum chat on it but then have a good chance of missing out on it because the item sold out instantly.
Just my two cents and a longer customer who is still 100% devoted to this brand and won't leave regardless when the final decision is.....I think thats the beauty of us hardcore IH fans, no matter what happens, we're always gonna be around (even if we don't post as often as we used to
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Yeah I definitely don't care at all about exclusivity — I'm too old for that shit
But also yes, that point aside I've never even seen another person in town wearing IH, aside from Clint. So I figure in most places, being the only person wearing something at the grocery store is nothing anyone ever has to worry about, haha… if anything, I'd be really stoked if I saw another devotee.
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Hilarious!!I did mention the notion of exclusivity in my longer rant. From my take on exclusivity, solely from the perspective of collectibility. I sure don’t need or want to be a part of some douchy club that only caters to the “in” crowd. And I agree %100. Don’t think I’ve ever seen another person wearing IH in my day to day. Not even when I’m out on the town, so to speak. Like @popvulture id probably accost them and talk their ear off about it all.
I speak to exclusivity from the level that I think IH is now. Not mainstream and very much a community. I’d be mega bummed if that ever changed.
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I feel like if you’ve managed to make it to the forum the war is over, you’re home…..haha, IH was my first clothing forum and I was completely confused about the entire concept and didn’t post anything for awhile after joining. But once I got involved it became so clear how special this all was to have this level of involvement with any other brand. And how fucking lucky to get it with your favorite brand!
It’s been so exciting to see membership grow and new folks become IH fanatics and I think (and has been mentioned prior) the fact that this is even a topic of discussion shows how much the brand is growing. And yes, I would buy IH without the forum, but I can definitely say involvement in the forum and community has definitely opened my wallet when I might have otherwise passed on an item
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Also @Mizmazzle , I reread my post and realized that my tone with the “exclusivity” piece may have been interpreted as pointed. My apologies if it was interpreted as such.
No harm or meanness meant at all….nothing but love/respect from me brother
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None at all taken my friend. @Dstauffer it feels great to be a part of something like this. Sometimes when I buy something from another brand…even one that makes high quality gear…I’m like , damn!! I can’t share conversation over how it fits or how it stretches of the effect of washing/ drying. Why isn’t there 3 years worth of evo updates on each garment!!!? Oh yeah, there’s only one Iron Heart and if you get it you get it!! That’s the only admission required to join the club!!
Now, back to my finger exercises. T minus 15 hours and 18 minutes until those cords drop!!
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I bought a pair of 888 slubbies and a wool lined CPO and ended up not liking the fit. I went to sell them and was surprised how difficult it was to sell. The secondary market is tough for IH products. I get it if they are showing fades but both where in brand new condition and in common sizes. I had to greatly discount them to get them sold.
Basically it cost me 300 dollars to learn the size and fits that I like. That's a tough cost of entry but I have been searching for the top tier of rugged clothing and am willing to pay to play. Now if someone would just sell me an Olive 13oz Military Serge western in large
Never had a harder time finding a shirt in my life ( other then a Wills ).As far as making more inventory to attempt to meet demand. I think there seems to be plenty made during initial release for everyone to find what they want. Just have to always be paying attention and that model keeps people active in the community and ultimately leads to more sales. Except the 13oz Military Serge in Olive Large haha ( It was released before I discovered the brand )
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I'm thrilled to see that IH is doing so well!
This was the first year in memory that I had to say no to a lot of pieces that I swore I would pick up. From the moleskin olive CPO to the quilted nylon jacket. My industry is a bit rocky at the moment, I'm saving for the growing kids' college, and have begun to run out of closet space LOL. If I'm honest, the last one is probably the biggest reason
But I'm relieved to hear that first time customers are rolling in to replace some of the veterans whose wardrobes won't shut.
As for the resale market, I can only assume that people don't have the spare cash that they once had. And, to G's point on production quantities, maybe the pieces that were getting gobbled up immediately over the last 5 years on the resale markets were pieces made back when production quantities were lower. There's probably a lot more 2019 UHFs floating around out there than 2013 UHFs. Availability and FoMo. When I see something on eBay that I want, but don't need, and probably shouldn't buy, I usually ask myself "What's the chance that I'm going to see this ever again?" and make my decision based on that.
But if IHUK is doing well with the current production quantities, then don't fix what's not broken
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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.
I actually agree with you, to a lesser degree here. I think this seasons flannels was one of the most polarising of recent years, and also there were some similar colours (anny and other sax, for eg).
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?
D2C customer interaction is not decreasing at all, and as @Giles said, first time customer sales are going up. Some retailers are struggling to move product this year, which is the first time I have head of such an issue. My take on that particular problem is that it is indicative of a wider economic issue globally, not Iron Heart per se.
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As for Iron Heart, the question of “throttling production” seems to beg the question, what is the long term plan?
I don't think that 'throttling' production is a good idea, and have no real interest in doing it. From an IHUK point of view specifically, in my eyes the main things that stand out as 'failures' this season are the UHFs. We have seen other, new and interesting things perform well (eg oiled N1 jacket), and core items continue to sell steadily. What we have seen this season, though, is a fuck ton of core product arrive mid FW22, after a long period of waiting. 21oz denim, 14oz denim, some shirts, jackets, etc. People only have so many $ in their wallets, and this year is a bit tougher than most for the majority of people.
On the UHF thing specifically, we have been trying to work out the demand globally for some products, and really have to do this through trial and error. Last year, UHFs pretty much sold out on our site in 24-48 hours across the board, leaving lots of people without. A lot of retailers also contacted us looking for more as they sold out so swiftly too, so clearly the total volume was slightly too low.
To counter that, we ordered a much, much (nearly double) higher volume this year, to try and gauge the ceiling. Whilst we now have a better idea of where the ceiling is, we also fucked up the numbers quite drastically.
Ultimately, part of what makes the UHFs special is their scarcity - I am very aware of this - but the only way to work out the ceiling on a demand sometimes is to push it way too high, see how high the spike goes, then adjust accordingly..
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@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 haven't done micro-economics since uni, but I think you'd be mad not to try and match demand. Or, rather, profits are maximised where you can match marginal revenue with marginal cost per item. So if you've got stock lying around, that's increasing costs in warehousing, etc, and may eventually lead to reduced marginal revenue if you're forced to discount them.
So when you ask if you went too "deep"… well you ordered too much stock when the marginal unit cost has overtaken the marginal unit revenue. Ask yourself, if you lowered the price to closer to your marginal break-even point, would they sell? If not, then yeah, you went too deep on those pieces.
Macro-economic forces will play a role in determining overall demand and supply too, of course, but from a micro-economics perspective it's the effect that these have on your marginal revenue/costs that matters.
As for breadth, I personally think you've got the overall strategy right. As I see it, you offer staples that come in and seem to move reasonably quickly, particularly in the most popular sizes, and then you do seasonal releases on top to introduce variety and keep people excited. (I was bummed that you weren't doing the cords in other cuts, but I note that some items from past seasons end up becoming staples and I live in hope for 888 cords... but I digress.)
Thinking about the UHFs, I don't think that the breadth was a problem this season - it was a good handfull of colourways in both shirt styles. I picked up 2 of them, the Anny and the Herringbone western, which I think is more than many would have gone for with your prices (not a jibe, I appreciate why they cost what they do, but they cost what they cost and are luxury items).
Like others have said, I thought this year's UHFs were a bit too loud, with colours that don't appeal to me. (I can't see myself going any 'louder' than the Anny shirt, it's just not my style.) I wonder if maybe you wandered a bit from the tastes of your core customers with some of them? But I might be thinking too personally... I know there are excited comments on some of the threads from past seasons' 'crazy check' UHFs, or those purple easy-shorts from over the summer, but there are some colours that I think are just too hard to make work with an outfit. Personally, I like having a wardrobe where I can grab any combination of tops and bottoms and know that it will work, and I buy things accordingly. If I were a style picker, that's what I'd be aiming to offer my customers, but that's just me and you guys will have a better idea of what your customers want.
Edit: P.S. I think this is a really interesting thread, and I love that the Crew interacts with us in this way!
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Some retailers are struggling to move product this year, which is the first time I have head of such an issue. My take on that particular problem is that it is indicative of a wider economic issue globally, not Iron Heart per se.
@Alex Interesting. Is that all markets (European, Asian, North American) or one more than others?
I'm going to use Canada as an example: In previous years I bought from IHUK directly because there were not any Canadian retailers to my knowledge. In the past, I had the majors (Burg & Schild, Self Edge, and Rivet & Hide) but always knew that product was limited and I only had a few chances to get a grail for the season.
Now I believe there are 4/5 retailers in Canada which I think is great for IH exposure, but now I know that if IHUK sells out, I have 5 other markets in Canada to possibly buy from as well as my goto International retailers.
My question is: Are you starting to reach a market saturation which there are now too many retailers in any given market and they are having to compete with each other? Most retailers are all offering the same services (some better than others), but there are many more options to choose from.
I guess the check would be to see if you are selling the same amount of product in general, but the sales are more spread out over a greater distribution of retailers.
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I’ll have been following the brand for a decade this year and as well as being a fanboy of the product, I’ve always been super interested in what sells, what doesn’t, and who buys. In addition to a dramatic increase in volume the output has developed in breadth and to a degree form. By this I mean the entire range, not just UHF’s.
I think part of the answer to the changes in the way the Marketplace works lies in the all the above, but also how the brand is perceived by its customer demographic. While there may be some crossover, the demographic of the forum (and by that I mean those who post), is not the demographic that is growing the most. The place where the crossover occurs is in the marketplace. And here lies the issue…
The fastest growing demographic is the 20-40, N.American based man, new to the brand doesn’t know about the IHSH-70 or the IHSH-101-BLK, and doesn’t give a fig either. For these guys (and this isn’t meant negatively), UHF’s are hot property. However, by and large, the current releases. Everything else is ancient history.
So the Marketplace was once used exclusively by the small, knowledgeable community who were aware of the brand. That has changed and is the partial reason for the change in buying habits.
The other thing is that previously these shirts were small batch. I used to think that was a deliberate strategy, but it wasn’t. Now that IH are in a position to go big on a wide selection of shirts, the rarity value is diminished.
When it comes to next years UHF’s, I think throttling back supply is a bad idea, but I expect that demand to level out and start dropping. Partially due to the global slowdown, but also because the hype amongst the aforementioned demographic will calm down. I could well be wrong of course.
If it were me running a successful global brand (which it clearly isn’t), I would look at producing one or two shirts less, but in the same sort of numbers. I don’t know what the economies of scale are like, but a more focused offering should cut costs while ensuring that the ones on offer are looked at more closely.
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This is an interesting discussion. But the numbers of it are less interesting to me than the implications for the collection. The integrity of design and fabrication is what really drives sales. But getting customers to understand what's informing the collections might take work. And whole collections are about ideas. The brighter colours seemed to me to be about coming out of lockdowns and living a more vibrant life. And yet the lookbook still was a bit domestic. The collections should tell a story, invent images, make feelings, etc. If it's about the brightness of life and the joy of luxury (I'm also thinking of standout pieces such as pale rider and perpetrators) that might need a crowded lookbook in a party atmosphere. Go decadent, opulent! All of this is to say that I am suggesting that for the numbers to grow, perhaps the storytelling needs more investment too. I've enjoyed seeing more social media content come out and I saw that IH was hiring someone to work on that more, so it seems like you're already working on that. That is cool. I think for more some new customers to get what makes IH so good they will need some persuading.
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not that anyone really cares about my thoughts, but I almost posted something like this a couple months ago when a comment was made by Giles? or someone that the reservation / notify me of restock lists are poor predictors of demand for an item. For me the reason why I've "flaked" on some (most) of these restock notifications is because they took so long, for whatever reason, and in that time, I found something else to take its intended place, often a similar item IH makes that released first that cannibalized the sale of the first item. (e.g. got a 14oz jacket b/c 19L's are still not in stock, got a kersey b/c the uhf i wanted was out, etc)
Where this led me, and what I was going to post back then, which is perhaps fitting in this thread, is that it occurred you all may have too many items, in too many cuts, in too many fabrics, colors, styles, etc etc. The permutations add up quickly and don't usually seek to meet the baseline demand of your "core product" and in some cases actually dilute your ability to meet demand by using limited amounts of fabrics on these different permutations. The things you wish to be defined by, other than amazing customer service, should always be in stock or always soon due so that anyone wanting to join the club is only a couple of weeks out. Perhaps this could be something like keeping XHS and 21oz in all of your jeans ready to go, or whatever makes sense for you. I recall someone again from the IH crew making a comment about limited fabric qty on high demand items during the sale and how those were excluded, so that's where this thought came from as well.
On the other hand, focusing on these core items and giving priority will detract from your ability to try new things to keep existing customers from buying more and also attracting new folks with what's around the corner for FW or SS. I get that too, but this past season seemed to be flooded with options. Personally I was amazed at the capacity given what I thought was the case and also confused by why some things I've been waiting on are still not in stock.
I guess the TL;DR here is to do less / make less so you can focus on what makes IH, IH. Maybe this post is a bit extreme, but in general this was inspired by other Japanese hobbies (tenkara, natural sharpening stones, knives, deep sea jigging) where they seek to do the absolute best with the minimal amount of whatever.
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Anyone from IH can correct me if I’m wrong, but I think the limitations on keeping core items like 21oz denim in stock at all times is due to the factory’s ability to weave the denim in the first place. Then once a batch of denim is made, this has to be spread across so many cuts to keep everyone in jeans that fit, it’s been a constant battle to rotate the denim they’re able to weave among the patterns that are most needed at any given time.
I’m sure there’s more nuance to it than that, but we are dealing with special fabrics that are being made in smallish batches by small factories. Only so much growth can be accommodated.
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