Monday, April 30, 2012

POS Lite - Is Good Enough For a Farmers Market, Good Enough For You?

Over the past year several different inexpensive and mobile systems have cropped up in the point of sale arena. The title “point of sale” has been given, which is technically an accurate statement but may conjure the wrong meaning in a retailer’s mind.

Point of Sale is defined as referring  to a “POS terminal or more generally to the hardware and software used for checkouts, the equivalent of an electronic cash register.” Technically Square, Paypal Here, Google Wallet are all point of sale solutions. The question is, does that mean that they could fit your retail technology needs? Could a system that appears to cost mere pocket change really be the tool of your dreams? Much like many other “too good to be true” options, cost does represent
quality. There is a definite market for POS Lite but a retailer must be careful to avoid the allure of the upfront price tag, especially with several of these systems stating they are a “full POS system”.

Can it handle your quantity? Per reviews it looks like these systems are best for low quantity (example: flea markets, fairs, concert sales booths and the like) transactions. The average weekly gross sales that fit for these products appear to fall around the $1,000-$4,000 a week mark. Be sure to avoid being boxed into an uncomfortably low ceiling.

Is this really going to cost less? With a set %2.75 on transactions (many charging for both credit and debit) you may end up paying more in processing fees than with a system set up with another processor; you will also be locked into that pay arrangement for the duration with no options to change to a lower rate. Research processor charges and how blanket charges on both credit and debit may affect your bottom line.

Do you need/want inventory tracking and control? These systems are designed for low quantity; how many products can it properly and effectively track and monitor?

Scalability is key. Consider, you may not be able to transfer all of that data over to a future system should you have your eye on expansion. This could cause enough of a shift in your marketing
efforts and client retention that you experience long term negative side effects.

What does it integrate with/what are its features? Is it compatible with, for example, your accounting software? Also consider security systems, security cameras, open to buy, etc.

Will your information be secure? Additional concerns to fully investigate are PCI compliancy and overall security for both yourself and your customers. How secure is the system, what happens to your clients data and how often/easy is it to hack? Check reviews, and review what your responsibilities are when you are taking financial information. Many POS Lite systems don’t focus on security, this responsibility will fall on you to ensure your clients credit card data
is safely handled.

A safe rule of thumb is to spend  2% of your annual gross sales on POS. If 2% comes out to over a few thousand dollars you should consider a system that also handles inventory tracking/control, has increased reporting features and is scalable. This will save you in man hours, waste, loss, hackers, theft and costly errors. The right system could very easily make or break your store. Be sure to make the decision that will move you into the long-term.

*Lite is used loosely to represent a version of software that is an abbreviated version or has limited features. It could also be referred to as POS Diet but I thought that might be a stretch.

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*Please note, this article was updated 5/14/2012 to correct the processing pricing statement from $2.75 to %2.75. Apologies for the typo.