As an ordinary fruit store in a third- and fourth-tier city, it earns over 500,000 yuan in profit a year. This miraculous fruit store perfectly exemplifies the business logic of an enterprise.

The idea of "starting a business" stirs many people's hearts like a dog's tail grass, from company executives to fresh graduates, all dreaming of starting from scratch, achieving financial freedom while having time freedom, and even building their own business empire, like Ma Huateng, Zhou Hongyi, and others.

Today's unexpected guest, Xiao Li, was inspired by this entrepreneurial wave. Despite family opposition, he resolutely quit his job of two years in a monotonous, predictable government position, hoping to carve out his own path through entrepreneurship.

On a weekend evening, Xiao Li, who had made an appointment with my wife, came to my home. Upon entering, he greeted me, "Mr. Song, hello. I'm the owner of Bailuwan Fruit Store, surnamed Li. Thank you very much for your patronage. Your family has made 30 purchases at our store. I've come specially to give you some fruit as a gift." With that, he placed a bag of imported fruits, including palm-sized durians, in the living room.

I had heard my wife mention this fruit store many times, always praising it. In recent months, most of the fruit our family consumed was delivered by this small store. My wife had also been encouraging our company to use their fruits for business hospitality.

Xiao Li continued, "I came this time to express my gratitude and also to learn if there's anything we could improve."

I roughly calculated that our family spent about a thousand yuan a month on fruit from their store. If they kept such detailed customer records, they likely had many customers like me. By that logic, their fruit store's profits should be quite substantial.

Looking at this capable young man, I glanced at the address on the fruit packaging bag and said, "Your store isn't close, yet you deliver specially for us. And you sell high-end fruits. Your annual profit should be considerable, right?"

He hesitated slightly, then said, "Since you're not a competitor, and I heard your company might use our fruits for hospitality, I'll be honest. Last year, the store's profit was about 500,000 to 600,000 yuan."

Hearing this figure, I was taken aback. In a fourth-tier city in the north, a typical fruit store earning 100,000 yuan a year is considered good. Their profit was five to six times that of an ordinary fruit store. How did they do it?

I became intrigued and, at my request, he detailed the store's entrepreneurial journey.

In fact, he had two previous failed ventures: one was a phone screen protector store, and the other was a franchise of a restaurant chain. Both ended in failure.

Afterward, he reflected deeply on his failures, read extensively on business management and entrepreneurship, and interviewed many successful entrepreneurs before opening this fruit store.

This time, he had a clear plan from the start.

****What advantages do I have?

Failed ventures often start with self-indulgence, fantasizing about good outcomes while ignoring why one deserves success.

His previous failures began with market research, diving into industries that seemed profitable without having a competitive edge. There are 360 trades, and each has profitable players and winners, but why should you be the winner?

So this time, he reversed his approach, starting by studying his own strengths and identifying suitable industries.

Having attended university in the south, where fruits are abundant, and having worked part-time at several high-volume fruit wholesale stores during college, he knew channels for high-end fruit sourcing. Those bosses and southern classmates could become supply sources.

Additionally, he came from a family of traditional Chinese medicine practitioners. Though he didn't inherit the practice, he had some knowledge, and his family could provide necessary information for therapeutic fruit combinations.

After careful consideration, Xiao Li chose the fruit retail industry.

****Who is the target consumer?

After choosing the industry, he needed to decide whose money to earn. Trying to earn from everyone might result in earning from no one. Different consumer groups have different needs, and it's impossible to satisfy everyone. The wealthy and those with essential needs are the easiest to earn from.

Thus, he positioned his consumer groups as high-end, upper-middle-end, middle-end (group buying), and those needing health conditioning. Corporate clients would be an extension of the high-end group.

These high-end consumers often have their own businesses or enterprises. Once they approve of the fruit, it can become hospitality fruit, also giving them conversation topics.

High-end consumers include bosses, high-ranking officials, and other high-income individuals; upper-middle-end include high-salaried professionals; middle-end include employees of well-performing units and some managers.

Once target consumer groups are defined, they determine the store's business model, profit model, marketing strategy, and location.

For example, since high-end and upper-middle-end consumers receive home delivery, and middle-end consumers rely on group buying, the store location doesn't need to be in a prime commercial area. It can be in a well-connected, leisurely, and well-known place, but the space must be large enough to serve as a flagship store and a turnover warehouse, with parking in front. Hence, he chose a storefront with a backyard in Bailuwan.

****How to find them?

Identifying target consumers doesn't mean they'll become customers; good wine needs no bush, but they still need to know you. So first, find them, establish contact, let them know you, and make purchasing convenient.

We found these target consumers by identifying cars of different price ranges. During street sweeps, we classified owners of cars over 500,000 yuan as high-end, 200,000-500,000 yuan as upper-middle-end, and middle-end consumers were contacted through group-buying leaders.

After locating these cars, scanning the QR code on flyers allowed them to taste imported or origin-specific fruits for free, with dedicated home service.

We created different flyers for high-end and upper-middle-end consumers, noting that all fruits are directly sourced from origin, free of preservatives, ensuring green health, and providing information on therapeutic fruits. For high-end consumers, free delivery was offered regardless of purchase amount. For upper-middle-end, free delivery was offered for purchases over 33 yuan. Different consumer groups scanned into different chat groups.

For middle-end consumers, we collected contact numbers of building leaders from residential complexes, approached homeowners' committee members and square-dance leaders, telling them that if they became group-buying leaders, they'd get discounted prices and a commission. We didn't emphasize origin for these.

After setting these strategies, we tested in a nearby residential area, placing flyers on cars worth over 200,000 yuan. Xiao Li personally handled the trial, including finding agents, distributing flyers, and delivering, to gather first-hand data and adjust strategies, while also developing scripts for different consumer groups.

For finding group-buying leaders, Xiao Li and staff divided tasks, then summarized and improved scripts nightly.

For in-store sales, we used zoning and categorization, from budget group-buy fruits to high-end fruits costing thousands, showcasing the flagship store, with customers growing organically.

****What are their needs?

The essence of fruit store sales is understanding human nature.

Different consumer groups have different needs and pain points. Only by addressing pain points that other stores can't solve can you succeed.

High-end consumers generally have money but need green, authentic-tasting fruits, and rare imports. They care about nutrition and health, but their pain point is limited time to shop, and supermarkets often lack variety or guarantee origin and no preservatives.

Since Xiao Li's store sources directly, these issues are solved, and order-based purchasing ensures freshness.

Upper-middle-end consumers want green and authentic fruits but worry about food safety. So Xiao Li's store promises 10x compensation if waxed or preservative-laden fruits are found.

Therapeutic fruit consumers are often sub-healthy or ill, focusing on therapeutic effects. According to TCM, many diseases stem from psychological issues and unhealthy diet and lifestyle.

Recovery depends on confidence and a positive mindset. Therapeutic fruits can't change mindset, but proper methods can enhance confidence. So, in the instructions for therapeutic fruit combinations, we cite classics like the Compendium of Materia Medica.

We don't offer all types but focus on the top six cardiovascular and cerebrovascular conditions, such as softening blood vessels, strengthening spleen and stomach, liver and gallbladder care, nourishing yin and lungs, kidney tonification, and heart care.

To boost confidence, belief alone isn't enough; action is needed. So we add ritual to fruit consumption, making consumers treat fruit as "medicine" and take it in "courses."

For example, for stomach yin deficiency, apples should be boiled with five red dates; for poor appetite, eat half an hour before meals.

All three types of fruits mentioned are directly sourced from origin.

For group-buying consumers, they want good-tasting fruits at a good price. Their pain point is cost-performance. So we use group buying with tiered pricing based on quantity, focusing on seasonal fruits with relaxed origin requirements.

Before each purchase, the group leader collects demand, then we purchase in bulk, pack in-store, and consumers pick up.

These methods effectively address different consumer needs.

****Why buy from you?

With so many fruit stores, why should consumers buy from you? You must give them a reason.

Bailuwan Fruit Store took three measures.

1. Product differentiation

Fruit quality is the foundation of successful sales. To ensure quality, we source directly from origin, tasting and comparing multiple suppliers for each fruit, keeping only 1-2 channels with the purest taste.

To have what others don't, we source rare imported fruits and therapeutic combinations, being the first locally. For green health in deliveries to upper-middle-end consumers, we promise 10x compensation, ensuring peace of mind. Thus, we outperform peers in taste and health.

2. Price differentiation

We categorize prices into four types: image products, high-profit products, higher-profit products, and low-margin products. Image products include miracle fruit and Strawberry Arno, imported fruits not found in local supermarkets, priced at 1,001 yuan per jin. High-profit products are imports like palm-sized durians. Higher-profit products are origin-specific. Low-margin products are seasonal group-buy items.

For group buying, we occasionally sell at cost to create a perception of cheapness, generating word-of-mouth and attracting more customers.

3. Packaging and promotion differentiation

We have three types of packaging: regular shopping bags, but all are custom-made with the store's name, address, and logo.

The second type is reusable shopping bags. Noticing supermarkets rarely offer reusable bags, we customized our own, with a load capacity over 8 kg and an inner pocket for small items, distinguishing them from common non-woven promotional bags.

These bags can be carried during daily shopping, serving as walking advertisements, more cost-effective than other ads. They aren't free; they're given with purchases over 48 yuan.

For promotion, we rely on word-of-mouth and bag advertising. Our catchy slogan is easy to remember: "Bailuwan Fruit Store, a place in Rizhao you must visit."

Considering the store's image, we give extra tasting fruits to elderly and children after payment, as they're kind and sentimental, often becoming repeat customers. This also creates conversation topics.

To make shopping fun and keep high-end and three upper-middle-end groups active, when new origin fruits arrive, the first three buyers get 50% off.

For rare imports with limited quantities, we sometimes auction, setting a base price and accepting bids for 3 hours, with the highest bidder winning. We also run "red envelope" activities, where the first five winners get discounts, and the last gets 3 jin of a certain fruit free.

These activities also generate buzz.

****How to build competitive barriers?

Any successful model attracts imitators.

Xiao Li's store was no exception. Many fruit stores, seeing his success, began vehicle surveys, origin fruit concepts, and free delivery. Fortunately, Xiao Li had prepared, so the impact was limited.

He knew that while channels and products can be copied, only brand is a moat. So he took five measures:

  • He named the store "Bailuwan Fruit Store," which sparks curiosity: Is it a fruit store, candy store, or pancake store? It's also easy for regulars to remember.
  • The slogan is "Bailuwan Fruit Store, a place in Rizhao you must visit." Why must you visit? What's the benefit? To support this and encourage repeat purchases, first-time visitors who scan into the retail group get 20% off.
  • All fruits are tasted before bulk purchase; anything mediocre is never sold regardless of price. Origin-labeled fruits are sold with integrity, never substituting inferior produce. All sales use bags with the store logo to build brand association.
  • For surprise and delight, we occasionally gift unexpected items to high-end and upper-middle-end consumers. For example, educational blind boxes for those with children, or birthday cakes, movie tickets, and unseen imported fruits for frequent buyers.
  • For the best-selling therapeutic fruit combinations, we embody a benevolent business philosophy. The top line of the "Usage Instructions" reads, "Love given returns; blessings sent come back." The bottom line says, "For every box of therapeutic fruit you buy, Bailuwan Fruit Store donates 0.3 yuan to help impoverished patients who can't afford treatment."

He didn't price these popular therapeutic fruits at a premium, despite the easy profit, choosing to sell at a fair price.

Due to the pure taste and good reputation of high-end fruits, especially the therapeutic combinations, demand outstripped supply. Thus, the business expanded rapidly, from a few nearby neighborhoods to dozens.

Crucially, many high-end consumers with luxury cars became loyal customers.

At the end of our conversation, I asked, "Xiao Li, what do you plan to do with the money you earn?"

Without hesitation, he replied, "I'll donate most of it eventually!"

After our talk, I fell into deep thought. This unremarkable fruit store perfectly illustrated the business philosophy of an enterprise. Isn't the reason our company, among others, has stagnated because we lack Xiao Li's business wisdom in some aspects?

Source: Sales and Market (ID: cnmarket)

Are you "watching" me?