Holden Lewis: And I would say there’s also availability elements in the marketplace as well. During 2020, 2021, there weren’t a lot of distributors that had availability of product and we benefited from that. As the supply chain is normalized, the marketplace sort of normalize as well. And I think what you see is it’s a little bit more competitive in terms of customers being willing to say, “Yes, we’re going to test the market a little bit”. Again, I don’t think that’s unique to us. I think it’s fairly typical in the market. And I think it’s reflective of the degree to which things have frankly normalized at this stage of the game. And it allows us to really talk a lot about exactly what Dan said which is the supply chain solutions and how that differentiates us in the marketplace.
Dan Florness: And Josh, in the interest of full disclosure, I probably would have gotten your last name incorrect.
Operator: Our next questions come from the line of Tommy Moll with Stephens.
Tommy Moll: Can you give us an update on fastener product margins? And I know that associated with those, there’s potential for some renegotiation just on pricing that has given some of the volatility around steel and shipping. Any update you could give there would be helpful as well.
Holden Lewis: Yes. I mean product margins, when you break fasteners into OEM versus MRO fasteners, product margins are fairly stable. When I think about price cost in the fastener arena, it’s fairly neutral at this point, right? So I mean from a costing and margin standpoint, I think things are fairly as expected. Now I will say, I do believe that we have had circumstances where again, there’s contracts that require some adjustment based on end markets where I do believe that we’ve begun that process. But that is in — that is really aligned with what we’ve talked about before as we see our costing improve and we have on imported product that we have certain agreements with certain very large customers that we’ll adhere to and I think that you’re seeing that happen. So it’s largely, I think, as we expected. I don’t think they were having any adverse impact on our overall profitability level. And that’s probably how I’d characterize it. Does that help?
Tommy Moll: Indeed. I also wanted to talk about supply chain and in the prepared materials this morning, you talked to the reduced inventory is aided by a shorter product ordering cycle for Fastenal. I’m curious, though, with the better supply chain, do you see some of the same for customers? And is there any impact on your daily sales trends from that?
Dan Florness: If you think about what we do for our customer, we’re the buffer. If we’re supplying product to them. And again, I’m really talking about both sides of our business, whether it be plan spend or unplanned spend. If supply chains are taken 30 days longer, we build that inventory so we get it to them when they need it. So I don’t know that there would be a destocking element downstream from us. I’m sure there’s examples of it. If there is a destocking element, it’s because a customer had built up finished goods because they had a strong backlog. And that backlog has been worked down, their finished goods has been worked on. And as they’re in that process, that impacts us because they lower their production. And so it isn’t so much because the supply chain change is because downstream, their needs finished goods changed.
