Today, I'd like to start with a question: Do you think running a lightning warehouse is a tough business?
I believe that lightning warehouses are indeed a tough business right now. High investment, fierce competition, troublesome management, 24-hour operations, owners working as employees every day, high staff turnover, and significant losses if you fail.
But a tough business doesn't mean there's no opportunity. The foundation of lightning warehouses is healthy; the key is whether you can execute refined operations effectively.
A Tough Business, But Worth Doing
There's a pharmacy near my community that I haven't visited in almost two years. I used to go often, not because the experience was good, but because it was the only one nearby; otherwise, I'd have to travel far—no choice.
The clerk was particularly naggy, always pushing me to buy expensive medicines. The worst part was that they'd hide well-known, reasonably priced medicines deep in the shelves, making them hard to find, forcing you to buy pricier alternatives.
But in the last two years, you can search on your phone and see all pharmacies within 3 to 5 kilometers, ranked by price from low to high, with 30-minute delivery—why would you go to the store and endure that?
This made me realize a fundamental change: instant retail is an amplifier.
It puts all stores within 3 to 5 kilometers on one screen, ranked from high to low. Stronger competitors get more business; weaker ones can't even hold onto their local customers.
That's why lightning warehouses are a tough business—without distance protection, competition is more naked. And there are three very real problems.
First, no promotion means no traffic.
The essence of promotions in lightning warehouses isn't to sell goods but to signal to the system your order fulfillment capability—your store score, out-of-stock rate, and fulfillment rate.
So new lightning warehouses launch with heavy promotions; now the opening budget starts at 100,000 yuan. But every year, several new warehouses open in the business district, and each promotion diverts orders from existing stores.
Second, each store opening impacts the market once, and closing impacts it again.
Many newcomers enter the industry, spend heavily on opening promotions, and take a share of orders from existing stores.
But many of these newcomers lack operational skills; their store scores don't improve, and once promotions stop, they start losing money.
What do they do? They close down, have clearance sales, and dump inventory worth hundreds of thousands at low prices, causing another shock to the entire business district.
Third, investment is much larger than expected.
Previously, you might think you could set up a basement with some goods and open, but now a lightning warehouse requires an investment of 1 million yuan. If you can't continue and want to clear inventory, the market price for buying back inventory has dropped from 30% to 10% of cost—too many closures, buyers can't keep up, and prices have fallen.
So why still do it?
Because today's lightning warehouses genuinely solve consumer pain points—forgetting a charger on a business trip, not finding swim goggles for swimming, or needing extra luggage when moving.
For these scenarios, e-commerce can't wait two days, and offline stores don't have the items; only lightning warehouses can meet the need. So its foundation is solid; it's a business model that truly creates value.
This business isn't mysterious. When competition is fierce, some people can't hold on and exit; after they leave, the remaining ones have it easier. Previously, profits were high because competition wasn't intense; now it's hard because it's too competitive.
For practitioners, the key is to improve refined operational capabilities, become the winner, and wait for the day when business improves.
A Formula and Two Steps
So where do you start with refined operations? Let's first establish a basic cognitive framework.
Lightning warehouse sales = supply × exposure × conversion rate × average order value × repurchase rate
Supply refers to product richness. Traffic for lightning warehouses mainly comes from search rather than recommendations; each product is a search entry, so more products mean more traffic. But also pay attention to the balance between richness and slow-moving items; many warehouses now have monthly sell-through rates of only 50% to 60%, with serious inventory buildup.
Exposure is behind the weight. The traffic in a business district is fixed; your ranking determines how much you get. The essence of running a lightning warehouse is: how to obtain the highest weight in the business district at the lowest cost.
Conversion rate and average order value determine the efficiency of traffic monetization. Platforms will definitely tilt traffic toward stores with higher conversion rates. The key to average order value is upselling—through minimum spend discounts and related recommendations, get users to buy a set instead of a single item.
- Repurchase is becoming increasingly important. Meituan's mechanism will continuously recommend stores you frequently buy from, and consumers will build trust.
The above is the formula from an operational perspective. From a user perspective, it can be broken down into two steps:
Step one: "Search"—can they find you, and what's your ranking;
Step two: "Browse"—after entering the store, browsing stimulates purchase interest, testing your product selection, layout, and promotions.
Four Fundamental Skills and Promotion
The formula and steps are cognitive frameworks; when it comes to execution, there are four fundamental skills.
Fundamental Skill 1: Search Optimization.
80% of traffic comes from search, but consumer searches are highly random. For example, when buying a desk lamp, some search "portable desk lamp," others "soft light desk lamp," and others "dorm desk lamp." The more comprehensive your product name coverage, the higher the chance of being found.
Different regions have different search terms; for example, for dipping sauce, in Guizhou, you need to use the term "蘸水" (dip water).
Also, product quality score is important; the more complete your information, the better the system recommendations.
Fundamental Skill 2: Product Selection and Assortment.
- First, the overall structure should be reasonable—the ratio of traffic drivers, profit items, and long-tail items should be appropriate.
- Second, build awareness of the business district; frequently search to see how rankings change. Different business districts have different consumer needs, and search results differ.
It's recommended to watch live streams and e-commerce to see how others introduce products—they compete nationally, so if they do well, their introductions are effective.
- Then, category management: improve category by category, list competitors' products, and analyze their selling points.
Don't completely copy; complete copying is involution. The smartest way is to see why they sell well and copy the selling points.
Products should be adjusted dynamically by month and season; it's recommended to calculate the holding cost of each shelf to eliminate products. Traditional supermarkets have the 52-week MD practice; lightning warehouses can also develop in this direction.
Fundamental Skill 3: Key Products.
The value of key products isn't just their own sales; more importantly, they bring traffic to the entire store—many customers enter your store after searching for your key products.
Establish daily, weekly, and monthly tracking mechanisms, and remember to search at fixed times daily—Meituan's rankings change at different times.
See which products have potential, and cultivate their sales base through promotions and paid traffic.
Fundamental Skill 4: Site Selection and Store Launch.
The best way to choose a location is to "lean on a big tree"—check the sales of existing stores in the business district. If sales are good but you think competitors' operations are average, that's your opportunity.
The key to launching a store is to align with the system's judgment logic; being slightly better than other stores in the district is enough. Don't make data too exaggerated; the system will think it's abnormal, and costs will be high.
Regarding promotion, it's not a panacea.
If your store conversion rate is below 10% and order conversion rate below 25%, focus on improving internal operations first; don't promote.
When to promote? When conversion rates are high to increase exposure, when cultivating key products, and when leveraging organic traffic.
The key is to find the optimal cost per click; test one price per week, calculate the relationship between bid, exposure, and profit, and find the best return on investment point.
For promotional products, choose obscure categories; Red Bull and Coca-Cola are done by everyone, not scarce, so results won't be good.
Also note that in different business districts and stages, the platform's return on paid traffic varies.
When the platform enters a new business district, it focuses on acquiring new customers, and new stores get extra traffic;
In the mid-term, you need exclusive competitiveness; deep partners get more traffic;
In the later stage, the platform focuses on profitability, and paid traffic may yield better results.
I once talked with a Meituan executive who said the weight formula has over 200 parameters, known only to a few core people, and they change across business districts and stages.
So for operators, it's still essential to test to see causal relationships and then guide operations.
Final Thoughts
Today's lightning warehouses are indeed a tough business—no distance protection, naked competition, promotion hostage-taking, and clearance shocks. But it's also a healthy business that solves real consumer needs for urgent purchases, and the winner takes all.
How to do it well? One formula, two steps, four fundamental skills, plus promotion review—this is the basic framework for refined operations.
In this era without distance protection, the only umbrella is our own operational expertise.