diff --git a/docs/examples.md b/docs/examples.md
index 50a7a122..7b563ab9 100644
--- a/docs/examples.md
+++ b/docs/examples.md
@@ -374,6 +374,48 @@ systemd:
         WantedBy=multi-user.target
 ```
 
+### Creating derived configs
+
+A common scenario will be to have a "base" Ignition config, and
+you want to create machine-specific versions that e.g. contain
+static IP addressing, a static `/etc/hostname`, etc.
+
+Another common scenario is to have a pool of some bare metal machines
+with one set of disk configuration, and another set that differs.
+
+In the following, the `base.ign` is an Ignition config file you
+have locally, generated via whatever mechanism you prefer (could also be butane, or not).
+These examples just change the value of `/etc/hostname`, but everything
+above (storage configuration etc.) can be added too.
+
+<!-- butane-config -->
+```yaml
+variant: fcos
+version: 1.1.0
+ignition:
+  config:
+    merge:
+      - local: base.ign
+files:
+  - path: /etc/hostname
+    contents:
+      inline: foo.example.com
+```
+
+<!-- butane-config -->
+```yaml
+variant: fcos
+version: 1.1.0
+ignition:
+  config:
+    merge:
+      - local: base.ign
+files:
+  - path: /etc/hostname
+    contents:
+      inline: bar.example.com
+```
+
 [spec]: specs.md
 [dropins]: https://www.freedesktop.org/software/systemd/man/systemd.unit.html#Description
 [fcos-auth-docs]: https://docs.fedoraproject.org/en-US/fedora-coreos/authentication