[MUSIC] With the same, sort of fixed assets we were able to produce, very little at the beginning and then produce a lot at the end. But it seems that we were reaching the efficiency. So it doesn't seem very feasible to keep reducing. We were able to reduce the cost just one point in the last term, so, in the last year. So we're not going to be able to reduce it more, it's going to be difficult, right? Remember that 29, 24, 20, 19, and this is where we kept it. What do you want to, put 18? And what do you do, you fire someone? You consume less, this is basically for heads and salary, right? What about the margin? The margin, can we reduce the COGS because gross margin is basically either increase prices or reduce COGS, right? Can you reduce COGS? We remember the supplier is just only one. He has all the bargaining power. All the bargaining power is on the supplier hands. And he is Andrew Widas, can we ask him for a reduction in the price? He's going to say I offered you a reduction in the price if you pay me early, but you're not paying me early. I'm not going to give you 94 days of payment and on top of that a 2% discount, there is no way. There's no way we can reduce the costs, right? He has all the negotiating power. But why don't we increase prices? Doesn't seem to you that this is a pretty interesting idea? But how much? Let's not, try to be realistic. How much would you increase prices? Would you increase a 10%? This might be too much, right? I don't know, I mean if you go to buy something that you buy every single day. For example, you go to supermarket and then you use the buy the milk at let's say 1 Euro, 1.1 Euros. Now if you go the next day and instead on 1.1 Euros it's 1.2 or 1.25 you will be like come on, you can't increase prices that much in such a little time, right? Why? Because it something you consume a lot, right? Now the small constructors that are actually buying form us, they are consuming they come on, they order, every week right? So they are used to buy a lot of stuff from us. But what about 2, 3%, the 2 or 3% is not that much actually. If our clients would be, is not in different. Some clients we will lose, right? But many will be in different if we increase the 2% or the 3%. For them will be in different in a way. For us, our P&L would completely change, would increase dramatically, right? I mean, remember that the gross that we had is 1.5%. If we increase prices, in 3%, we're going to jump the to almost 4%, right? So this seems to be an interesting idea. And we can actually distinguish the increasing prices depending on the inventory that we have. Remember we are selling 200 references and the competition only sales 10 references, so we could actually increase the prices of the references that half Low Rotation, references that are very specific if you a small contractor comes to us and then says I want to buy these specific thing that he buys only twice a year. If we increase that at 10% or at 15% it should be probably okay. He's going to buy from us in any case because no one else has it. Whereas the items that everyone has we cannot increase a lot. We maybe would, the most sold items, the ones that the competition has but has been we will increase only 1% or 1.5% or 2%, right? Now, it turns out that in a way, what we were saying that if we do not increase our profitability we can grow that much, we cannot grow a 25% because we will explode, right? So in a way but at the same time, growth is good. We cannot tell an entrepreneur or a manager of a company and say, you should grow less. He's saying, well, I set up my company to grow. How are you going to tell me to grow less? Because growth is very good, right? But growth has to be sustainable. It seems we are growing too much for the profitability we have. It seems we are growing too much. Now what is not too much for our current situation? Or in another words if 25% is not sustainable, what is our sustainable growth? At this concept of sustainable growth, it's a very important concept because it links directly to what we having explaining so far. So the growth that we want to attain right now, this 25% is not sustainable if we don't change anything or if we do not increase prices. So what is our sustainable growth? How can we compute this sustainable growth of a company. And this is what we're going to see next [INAUDIBLE]. [MUSIC]
