The paramagnetic field produced by the aligned magnetic moments reinforces the external field, but at room temperatures it is an the average only approximately 10 times stronger than the diamagnetic field and therefore still very weak. When a piece of ferromagnetic material is placed into an external magnetic field, two things happen. The spins in each domain shift so that the magnetic moments of the electrons become more aligned with the direction of the field. Domains aligned with the field expand and take over regions previously occupied by domains aligned opposite to the field. In this way the piece of material becomes magnetized.
Iron comes in two forms, hard and soft.
Hard and soft are term describing the magnetic properties of the material. In hard iron the domains do not shift back into their random positions when the external field is removed. In soft iron, the domains do shift back into their random positions when the external field is removed. To make permanent magnets a piece of hard iron is placed into a magnetic field. The domains align with the field, and they retain most of that alignment when the field is removed.