Supply and Demand of Iron Heart Products
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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.
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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
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[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.
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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.
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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.
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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.
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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.
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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…
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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.
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Am hitting on the ten years now.
What do I I know, over the years the stuff I bought there still is a demand.
Or how many people I have influence.
New comes will keep coming.
Which is a good thing.But I do know that Iron Heart is a very strong company.
Not many companies in Japan are like that.
In my opinion will get more bigger..Supply and demand will increase over time.
Something will have to be work out.
Time changes everything thing.
As only were more Iron Heart now
Covid came Brexit Happen and the Russia war
Customers stays with Iron Heart in these hard times
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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?
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I don’t envy Giles and Alex trying to balance supply and demand. IH is never going to be mass market, so I’m not really bothered whether something is very exclusive or just slightly exclusive. For me, I think being in a position to have and enjoy good things is more important than having something other people don’t have.
The focus on well made clothing that lasts might seem self-defeating, and Giles has say there is a constant need for new blood, but I’m sure it’s the right approach. Even if we are temporarily sated, we will come back even if we are in maintenance mode rather than wardrobe building mode (I’m probably somewhere in between). I suspect the forum helps here as involvement in the community does not depend on recent purchases and ensures we are exposed to the Filthy effect (or whatever else grabs us). Even enjoying others enjoying stuff we like (or the other fun stuff) keeps us engaged and primed for the next purchase.
I’ll stop before I start rambling
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Yes, it seems finding the balance of supply and demand and maintaining the company’s growth model is quite the juggling act. I wonder, and do not mean any rudeness, what the long term plan of the company is?
Is it to maintain a balance of bringing in new customers and retaining long term customers in order to stay in a relatively niche market…or to achieve global domination and sell the company one day to a larger corp?
It seems the greater the volume of product, the more the secondary marketplace will become saturated.
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If I'm not wrong, most of the IH UK's sales figures might have been mostly driven by new comers to IH. I'm pretty sure, if you do some data analysis over the last few years, you will see this trend - New comers to IH start exploring, buy their first IH piece, blown away by the quality, they start slowly building their wardrobe and once they have enough collection, it starts to flatten out for them. From there on, they start to get more specific. So, to keep the sales numbers stable, IH needs new customers.
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…or to achieve global domination and sell the company one day to a larger corp?
Hopefully this won't happen as long as I am alive. For me a big reason why I love the brand is the bond to the people involved. IHUK, how they live and love their brand… definitely part of the game, I don't no other company that is run by such an awesome group of people
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In my opinion it would be silly to throttle the supply (assuming you can eventually sell everything, of course). I’m loving the fact that I don’t have to set an alarm on my work calendar for each new flannel release this season.
I couldn’t help but notice that almost all of the flannels this season are still available and many still have 9+ in the most popular sizes. My guess is that three things are going on: more were produced to keep up with demand, less money in peoples pockets due to inflation and investment losses, and some of the designs are less appealing to the masses.
I think the first two points are leading to both increased supply and decreased demand in the second hand market. It shouldn’t be unusual for used items to sell for 50% or less of their original cost…sellers just need to lower their expectations. Ultimately iron heart sells functional clothing and not collectibles.
Just my two cents!
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Although there's surely no quantifiable way to do so, I'm curious what the percentage of IH pieces that have been sold over the last 10-15 years are still wearable today. With as many corporations that depend on planned obsolescence, I assume that most Iron Heart items that are in circulation worldwide are still usable in some form or another. I've never managed to destroy any Iron Heart items that were damaged enough to dispose of.
