Sales - The Iron Heart Position…..
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Sales.
Sales are a necessary evil of being a retailer.
In a perfect world, a retailer would perfectly predict demand, and create supply to perfectly match that demand. If that were possible, there would be no need to; discount product, store extra product (therefore reducing the requirement for storage space), do endless stock checks on stuff that is not actually selling etc.etc. etc. If we could achieve that then we could reduce the retail price of all our products because our cost base would be significantly reduced. And I think we would all be ecstatically happy. But, as I have said many times before, the art of being a retailer is not how often you get it right, it is how often you do not get it wrong.
There are of course brands and retailers who have sales and discounts priced into what they do. Liberty of London wanted to stock Iron Heart once, we had a few discussions and it became glaringly apparent that their model would not work with ours. Our model is to make stuff that we endeavour to sell at full retail, it may take time, but that is what we try to achieve. Liberty’s model is to initially mark up product by 5x wholesale, see what they can sell at that price, and then drastically discount throughout the season. They end up making a much smaller overall mark up than 5x (in reality, sort of what we make by doing what we do). So their initial price would have been far higher than our recommended retail price. I tried to convince them that overall, they would make the same margin if they did what we did, but I may as well have been speaking a different language.
So, we do get it wrong, and when we do we have surplus to shift. That is when we decide to have a sale. We often don’t put everything in the sale, we are a little selective. There is zero logic in discounting a product that we can’t keep on the shelves at full retail. Indigo 21oz and UHR are prime examples, demand at full retail is off the scale, we can’t make enough denim and we can’t make enough jeans in the workshops even if we could make enough denim. We have to try and keep our customers and just as importantly retailers as happy as we can. Telling a retailer that they can’t have some of our core products because we’ve just sold them all at a discount in a sale is a recipe for strained relations.
So despite not wanting to have a sale, we actually love doing it, more for the peripheral excitement than anything else, our regular customers don't mind a discount and we bring in lots and lots of first-time customers, which has to be a good thing for the longevity of the brand. Growing and maintaining a customer base is like chucking stuff into a funnel, you will get leakage, so you need to keep pouring more stuff into it…
And, why don't we announce sales well in advance, or have set times for sales? By announcing a sale well in advance, we will throttle sales and make less money. And, at the end of the day, we are a business and one of our goals is to make money, if we make money, we can spend money on R&D, pursue off-the-wall ideas, sample interesting things, pay our staff well, spend a massive proportion of our time on customer service etc. etc. etc
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I’m sure your retailers appreciate your not announcing sales well in advance too. They’d have people trying shit on and not buying it, for example, in preparation for the sale. That would be annoying.
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I really appreciate the transparency, which is rare in todays business world.
I just have difficulties to understand the purpose of the post. Maybe it’s because I’m not native English, but I read it a bit like a justification of why you do the things the way you do.
Everything you state makes perfectly sense to me. You are, or should be, a profit oriented business, not an NPO. There should be no questions around how you do a sale or am I missing something? -
I think the purpose of the post is to explain why IH does things slightly differently. Rare and good to get this kind of transparency. Thanks @Giles and IH team
PS I just ordered from the sale despite being on holiday in France… Looking forward to coming to Gosport in the end of August to pick up! -
I just have difficulties to understand the purpose of the post.
Because we are always being asked things like:
When is your next sale?
Why have you excluded stuff from the sale?
Why don't you do regular 6 monthly sales?
Some brands slash prices massively at the end of a season, why don't you?And I bet the CS team could come up with a few more…..
Now I can just point people to this post rather than re-inventing the wheel everytime I reply....
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The amount of time your staff has spent on customer service is apparent, and appreciated. And I think customer service is one of the most underrated aspects of running a customer-facing business well. There's a saying in the restaurant business that applies to retail as well: "People come for the food, and come back for the service." This is something that really applies to Iron Heart.
As far as sales go, I'll forever be a fan of high quality items that stand the test of time, and I don't mind paying full price for IH items because they absolutely define that category, and it's cool when a sale pops up because I can grab a few more things for my collection. And I always appreciate the transparency that comes from IHUK with things like this, so thank you @Giles, et al.
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I guess once people have tuned in to what IH do, they will get why you don’t behave like other retailers. When products are timeless and often in demand many years after initial release there’s no need for regular sales every few months.
A discount is nice, but probably doesn’t make much difference on a cost-per-wear basis. A model that provides the legendary IH customer service and everything else we love is, in my mind, worth far more.
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Last year that post would have only consisted of 4 capital letters. I guess that’s the benefit of retirement [emoji6].
Thanks for the info.
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People love to complain. I applaud your tact — my response would probably be the above method
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Yes! Very nostalgic.
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…I can't tell you how much I appreciate the candid, direct and honest approach in explaining the many facets of your business, bravo!
I hope it never changes.
...I just spent a grip right before the sale and I would of saved money had I'd known about the sale weeks earlier but I get it and I respect your explanation of the retail business side. It makes sense to me.
...Iron Heart is a special product and sometimes 'that's just the way love goes honey!'.
...and I still jumped in on the sale, I had to, HAD TO.
