Chapter 444: Warehousing

“Good. It looks like our previous worries about the navel oranges not selling were unfounded.”

Wang Yuzhang smiled and said, “Manager, for navel oranges of this quality, our price is the lowest. You might see some online for 24 yuan for 10 jin, but those are the absolute worst of the low-grade fruit. Our price offers the best value for money, hands down.”

“What about returns?”

“None. We haven’t had a single return in the half-month since we opened,” Wang Yuzhang said, shaking his head.

Jiang Xia looked at her son and asked, “Xiaolong, why do you think our supermarket hasn’t had any returns?”

“…” Zhang Xiaolong was stumped. After wracking his brain for a moment, he ventured, “Is it because they’re cheap?”

Jiang Xia smiled faintly. “That’s only part of the answer. You’re right that when customers buy something inexpensive, they’re more likely to just throw it away if there’s a problem rather than go through the trouble of returning it.”

“What are the other reasons?” Zhang Xiaolong paused, his pen hovering over the paper.

“The second reason is our relatively high procurement price. To avoid being dropped from our supply chain, the growers strive for perfection and screen out most of the subpar produce themselves beforehand.”

This was a key point the company’s procurement staff repeatedly stressed to the growers and breeders.

If their products had a defect rate exceeding 1% three times in a row, they would be in breach of contract and automatically dropped from the supply chain.

Since Hailufeng Company was paying them such a high price, they had to deliver quality worthy of it.

Under these circumstances, the breeders and growers didn’t dare try to pass off substandard goods. On the contrary, they would screen their products multiple times themselves. They would discard anything with the slightest defect, all for the sake of remaining in Hailufeng Company’s supply chain.

With perfection sought at the source, followed by a second screening by procurement staff and a third at the warehouse clubs and specialty stores, any product that made it to the shelves was already the cream of the crop.

Jiang Xia continued with the third reason. “Third, we built our own logistics system, so we don’t have issues with rough handling during shipping. This significantly reduces the number of defective products caused by transportation.”

Gao Ying and Wang Yuzhang nodded in agreement.

“Fourth, the company provides good employee benefits, and since product sales are tied to their performance bonuses, employees won’t just go through the motions. And don’t underestimate the role of the sales associates on the floor. If an employee wanted to deliberately cause damage—say, by bumping, squashing, or dropping products while moving them—they could covertly create a lot of defective goods.”

Wang Yuzhang related to this deeply. “That’s absolutely right. I used to work at another supermarket where the boss was always late with our pay and constantly finding excuses to dock our wages. A lot of my coworkers would secretly damage products. Once the items were marked as defective, they’d buy them back under the guise of ‘defective product disposal.’ It caused the supermarket’s shrinkage rate to stay ridiculously high.”

If you don’t treat your employees like human beings, they certainly won’t give you their all. They might even actively sabotage you.

This was all part of Jiang Miao’s business strategy.

Provide enough money and benefits, and you won’t have to worry about retaining talent.

Combined with a reasonable system of oversight and management, employees would be highly efficient and willing to put up with the company’s strict rules.

A company with nothing but strict rules, unsupported by good pay and benefits, will never be able to retain its employees.

It’s like wanting a horse to run without letting it eat. That’s just not how things work.

A lot of companies point to Huafen Company also having a “996” work culture, but they conveniently leave out the fact that Huafen pays its employees extremely well.

Take Pang Donglai Supermarket for another example—they genuinely give 95% of their profits back to their employees.

Just ask yourself, what other supermarket owner in the country would do that?

At Hailufeng Company’s specialty stores, the base salary might not look high on the surface, but that doesn’t account for the combined effect of benefits, performance bonuses, subsidies, dividends, and special rewards.

The housing benefit alone is a cost many companies are unwilling to bear.

But for a supermarket operating in major cities like Beijing, Shanghai, Guangzhou, and Shenzhen, if employees have to rent their own apartments and get gouged by landlords on utility bills, their salaries would have to be extremely high to make the job sustainable. Otherwise, the only people willing to work there would be locals who already own property and are just looking to coast.

Through this model, the company gives a large portion of the profits to its growers, breeders, and employees, keeping only a small fraction for itself. This ensures that the entire chain operates with high efficiency and low losses.

So what if they only made a margin of eighty or ninety cents per jin?

As long as the sales volume was high enough—reaching annual sales in the tens or even hundreds of billions—the profits would skyrocket.

Moreover, this profit-sharing model created a positive feedback loop. The growers, breeders, employees, and consumers all benefited.

People either saw their incomes rise, or they could afford better products on the same salary.

With a large number of farmers and employees enjoying higher incomes, they in turn possessed greater purchasing power.

And these people wouldn’t forget who was responsible for their newfound prosperity. When they had money and were shopping for similar products, they would most likely choose those from Hailufeng Company.

…

After checking on the situation at the Yangcheng distribution center, Jiang Xia immediately headed for Foshan City in the western Pearl River Delta to begin preparations for the second warehouse club.

At the same time, Gao Ying, the Deputy Manager of the Industrial Division, hurried to Goose City in the eastern Pearl River Delta to oversee the renovation of its distribution center, preparing to open a new warehouse club there as well.

Meanwhile, Qin Sixian, another deputy manager responsible for the Pearl River Delta Region, was tasked with completing the supermarket construction at the Shanghai distribution center.

「On the way to Foshan.」

Jiang Xia reported the status of the warehouse clubs to her younger brother.