Greg Roberts : I would say that we have seen more margin compression in the DTC. I would say that we have we have we have tested lower premiums. We have done a number of specials over the last 90 days to really test the elasticity of the market to really find out what depth in product our competitors have as well as what price and premium motivates our customers. So I would say in this quarter we have experimented and I believe it has been a very positive outcome in that I think that I have a really good idea today in this environment what price I can sell a million units of one ounce silver product for. I don’t know that I had that six months ago, because I don’t think we had the same — we hadn’t really experienced this exact same environment in a while, but we did a number of tests where we set very large targets to see and to educate ourselves on what price and premium under what spot price conditions we could overachieve as it relates to units.
So I think we’ve tested that, but with that we probably have seen a little more compression in gross margin and premium at the DTC side. I think the wholesale side has been compressed, but it probably not to the same extent as DTC.
Greg Gibas: Got it. That’s helpful. Greg. And a little bit more of a broad question, but wanted to see if you could address kind of avenues for growth and DTC and how you can capture more of the market and I guess along with that our inorganic opportunities more attractive in this kind of weaker macro environment?
Greg Roberts : I mean for me I don’t want to leave any money on the table. I mean, I look at our business as Sunshine and SilverTowne take 1,000 ounce silver bars that are A-Mark wholesale traders buy, our logistics gets the metal to the mints, the mints create the product and that profit opportunity goes from that 1,000 ounce bar all the way up our integrated business to the end user and I think that we’re unique and we are separated from our competition because we have a lot of competition in different parts of the value chain, as it relates to our gross profit individually, but we really are the only fully integrated business that can take 1,000 ounce bars off the exchange and turn them into one ounce silver rounds and get the our retail consumer to respond to if we want to be the cheapest we can be the cheapest.
I think the balance is always testing quantity, testing price, testing product and making sure at that DTC level that we are valuing new customers, which we have a metric for that. We’re valuing the sale and we’re valuing how it affects the rest of our vertically integrate integrated businesses. And just how to maximize and sell the right amount of ounces at the right price, all the while making sure we’re keeping our new customer count up, because we we’re fully committed to that new customer count, whether it be organic or whether it be through acquisitions. And if we have most of the customers, we’re going to get most of the business. We’re going to live through different macroeconomic, different environments, different supply and demand imbalances either way, but if we have the customers, and we make sure that we know how to motivate those customers, and we have a good idea of what we can expect from them if we test them, I feel like we don’t really care where we get the customers organically or through acquisition, we just want to get as much out of those customers as we can.
And if it’s in an acquisition, we want to get more of the wallet and more out of those customers than then the company that ran it when we acquired it the management or the or the company platform, if we’re taking customers from competitors and we’re gaining market share and we’re adding new customers that way, we value those customers maybe a little bit differently. And again, we want to make sure if they have $100 to spend, we’re getting their $100. And as it relates to geographic, we continue to work very hard on opportunities that we see out there geographically to bring in new customers. We work on how we’re going to value those customers and how that affects how we deploy our capital in an acquisition. And we are I believe the best in the business at analyzing opportunities and deciding where we’re going to deploy our capital.
Now obviously, as I’ve talked about before in our current situation, there is a lot of analysis that goes into capital deployment, whether it be stock buybacks, whether it be dividends, whether it be special dividends, whether it be M&A opportunities. And we’re very focused on as a management team being able to pivot quickly and being able to take advantage of opportunities that will have the best ROI for our shareholders, myself included as one of the larger shareholders. I’m super committed to what we’re doing here and long-term value and what making the right decisions today that will be positive in the future. And I think that the benefit we have, which I have said before is when we face some headwinds in the market and we have what many would look at as a slow quarter, $30 million EBITDA is still fantastic.
And I would say that there are many millions of dollars that are potentially out there for us, because our competitors are probably going to feel this slowdown more than we are, because we have the best business in the industry. And we’re going to also be offered opportunities for M&A that we would hope will be better return on investment equations then maybe in a very hot market. I think as I’ve talked about before we went through three out of four quarters last fiscal year where we were outperforming everybody but all of our competitors were doing very well. We were able to make outsized profits in that environment, but it didn’t bode particularly well for M&A on a large scale, because I was very concerned about what would the business be worth if we did have a slowdown.
