Sumit Singh: Hey, Brian, this is Sumit. So the improvement in how do we think about potential there. So I think you were asking a cost question. We’ve seen favorability to somewhere between 18% and 20%. So the volume fulfilled out of the 2G network was roughly 18% to 20% cheaper than the volume that we fulfilled from our first one legacy 1G network. And two, we’re still ramping volume into the third fulfillment center. So there is incremental volume leverage that we expect to gain, and we’re still continuing to scale our costs. So there is incremental productivity improvement that we would expect from our network. So all positive story there. In terms of the impact that we’ve seen we have. I mean, we’ve seen an acceleration both in €“ it’s reflected in the gross adds number.
It’s also reflected in the reactivation number as we’ve improved both our inventory positioning and as we’ve improved CX. This is not an exact science. So getting down to specific numbers is a little bit hard, but you can clearly see it in the way that our network plays out and our ownership rates, both kind of net and gross work out there, so, yes.
Mario Marte: And Brian, if I can add one more thing meter, if you look at where we are today, we have €“ you saw the numbers we recounted we reported in terms of the benefit in SG&A from these three FCs. And as a reminder, Reno just opened more or less at the end of second quarter. So it’s still ramping. So there is three FCs, one of which is ramping out of 13. And over the next year or a year, 18 months, we’re going to see a couple of more FCs open up that are also automated. So these are layers of profitability, as we said before, as we get more and more of our volume through these automated facilities over time.
Sumit Singh: Brian, if you add these up, like Reno has several basis points of improvements to give when it ramps. The next two, we size to that 30 to 50 basis points also said there is 20 to 30 basis points of utilization capacity, which is operating leverage, certainly get released. So when you add that kind of improvement, along with the fact that we continue to push more volume and expect lower cost we’re satisfied with the journey so far. there is more to come.
Brian Fitzgerald: Awesome. Sumit and Mario, thank you.
Sumit Singh: Thanks, Brian.
Mario Marte: Thanks, Brian.
Operator: Thank you for your questions, sir. Our next line of questions comes from the line of Corey Grady with Jefferies. Your line is now open.
Corey Grady: Hi, thanks for taking my questions. I wanted to follow-up on the pricing you’re talking about in 2023. Can you say more about what you’re hearing from brands and commodity costs and additional pricing and what you’re expecting in terms of the magnitude of pricing next year? And then on hard goods, so as we come off the COVID adoption cycle and sort of think about a potential recession in 2023, how are you thinking about a recovery in that segment? And what are the leading indicators you would look at to gauge recovery and hard good demand? Thanks.
Sumit Singh: Sure, sure, sure. So pricing conversations, it’s early to define or to put a range on the magnitude. So perhaps we could discuss that on the next earnings call when we have a little more clarity when we meet in March. We are expecting pricing to start rolling through in the Q1 time frame. So this will actually become more clear as we kind of wrap up the year and get into next year. So far, we’re not hearing of multiple rounds of increase. But then again, as we get more information, we will definitely pass that on. If you look at 2022, we’ve had four rounds of cost increases over the last 15 months. starting from Q3 of 2021 through Q3 of 2022. We don’t expect multiple rounds of cost increases coming, but there is certainly incremental cost that needs to pass through the system first half of next year.
