One of the most profound marketing tools to be employed in the world of streetwear is the “limited” runs. The mystique behind limited runs is that you have to be “in the know” to get the product. The product is also limited, obviously. And there was a sense that you were getting something really special, almost to the point that the intrinsic value of the product is more then the retail price.
I remember when I was collecting Jordans. The limited Retro IIIs in 1993 were indeed limited. In fact, there were no advertisements. You either cared about Jordans, or you didn’t. Let’s jump to the retro IVs of 1998-1999, same sort of deal. Let’s take a look at the limited Jordan releases now. Very limited marketing, however there is a lot of hoopla for every release. Why?
The answer is the internet. The internet has allowed Nike to find that niche (shoe collecting subculture), and market to them directly. By guising the limited information as leaked pictures, and trickling the information through “prominant” community figures, the marketing to this very desirable segment becomes more effective, as well as profitable. Long gone are the million dollar commercials, instead you leak the pictures on to Niketalk, eventually the right blogs will steal the pictures and offer their own twist on the information.
That’s a quick look into the effective use of “limiting” a release.
Let’s examine how much money is made. Let’s skip shoes, and work on…..New Era fitteds.
The Hundreds are wizs when it comes to “limited” New Eras. They release tons of choices each season, yet they manage to throw out a few “limited” colors as well.
I am not going to knock their hustle, after all I went to school with dude, but there is nothing wrong with a quick breakdown.
Fitted Retail: $50
Number of Designs: 5
Limited Number of Each Design: 100 (x5 = 500)
Total Gross = 25k
Let see if we can find the net by figuring out the cogs (Cost of Goods sold):
Design: ….$50 (they are using the same design they’ve used in the past 4 years, picking the colors shouldn’t be more then an hour)
New Era Wholesale: I am guessing they are $25 because New Era is a reputable and high desired brand, but in many cases the wholesale is 1/3 of the retail.
Store Operation: Let’s say $500 for paying 2 employees to take money, the electricity, storefront rent, and whatever else. This is a fair assessment in my opinion, and rather high considering they only have 2 retail store fronts, one website, a temporary art space, and European Distributors). Total $2500 (again there are 5 hats x $500)
Their cogs are roughly = $15,500
The Hundreds is walking away with 10k for the month from these hats alone. And do you think only 500 were produced????? Of course this is a super rough estimation, and one would neglect the amount of blood, sweat, and tears to make that Adam Bomb an icon (you can’t put a price on that).
No hate, just a quick assessment of the nature of “limited”.
