Purchase A POS System Or Risk Falling Behind Permanently
Point of Sale (POS) systems are the focal point of any business as this is where money exchanges hands between vendor and consumer. Up until the modern era, businesses of all sizes were content with the old-fashioned cash register which was seen as reliable if a little slow. Larger businesses soon realized that these registers were actually costing them money as rivals opted for POS systems which are quicker and have far more features. Nowadays, customers will not countenance doing business with a company that still persists with a cash register.
A POS system is a combination of computer hardware and software which have been networked together and has the ability to track a company's inventory and sales as they happen. It is estimated that companies with a POS system save more than 2.5% a year in comparison to companies that use the inefficiency of a cash register. For a small business that averages an annual sales revenue of $400,000, this is a $10,000 difference which will make or break most minor businesses.
Why Choose A POS System?
Companies that are still dubious about switching from a cash register should look at the following reasons for purchasing a POS system:
- Efficiency: POS systems rapidly speed up the checkout process which has the twin effect of making customers happy through reduced queuing time and ensuring more business is conducted in the course of a day. With old cash registers, it was necessary to punch every price in by hand. A POS system will have a scanning system which rapidly processes goods at the checkout.
- Extra Profit: A common problem with stores lacking a POS system is the loss of a sale as the store staff could not find an item for a customer on time. Modern consumers expect to be in and out of the store in a hurry and will not waste time waiting around as staff fail to locate what they are looking for. A POS system has an inventory tracking system which can immediately tell staff where an item is located or if it is in stock at all. Customers that experience such service will hurry back.
- Lower Costs On Inventory: The aforementioned inventory system ensures your store is never in a situation where popular items are constantly out of stock while less popular items clutter up the warehouse. The system will also be able to track sales meaning you will know how much of each product to order each month.
Picking A Dealer
Choosing the right POS dealer is a tricky task and one that requires research on your part. The correct decision will see a company get what they pay for, the wrong choice leaves you heavily out of pocket and frustrated.
Thing first thing you need to look for in a POS dealer is their level of support. It is imperative that you know exactly how dedicated they are in terms of how quickly they:
- Respond to queries/complaints
- Replace the POS system if necessary
- Provide telephone assistance
The next step is to analyze the company’s installation process. The best installers will take a measured approach and consider your business needs as well as taking into account your building’s infrastructure. The installation must be tested rigorously and the dealer should follow up with your company after installation to ensure everything is running smoothly.
A surefire way to find out more about a dealer is to ask for references. Organizations that are hesitant when it comes to providing names should be avoided. Ensure that you ask for references of businesses similar to your own. One slight problem with this method is that the dealer will refer you to customers whom they believe were most satisfied with their efforts but you can still learn important information. Questions to ask references include:
- Did the POS system dramatically improve the business?
- Were there any problems?
- If so, did the dealer respond in a timely manner?
- Would they do business with the dealer again?
How Much Does A POS System Cost?
Expect to purchase your POS system through a reseller rather than a manufacturer. It is possible to purchase complex systems whereby the reseller is in charge of installation, programming and support or simpler systems which merely need to be plugged in. A POS system, complete with support, hardware and software could set a company back anywhere between $2,000 and $6,000. The aforementioned plug-in systems are available for less than $1,000 but there will be no support and you will have to install and program everything yourself.
Price should not be the number one priority however. The above example showed that a small business with an average revenue could save as much as $10,000 a year by purchasing a POS system. It is a piece of equipment that will make things easier for you and your customers.
Beware second-hand POS systems. Although they are cheaper than new systems and should generally be reliable, the software license is almost certain to be non-transferable meaning an additional fee is due to the software provider if you want support and upgrades. In fact, you may even be forced to pay the full software purchase price which completely erases any savings you made on the second-hand hardware.
It is unlikely that you will be able to lease a POS system as virtually all dealers expect the full purchase price. Businesses who cannot afford the outlay should consider a small bank loan. Failure to upgrade to a POS system will leave many businesses in the dark ages where they will fade from view until they are gone.