POS equipment is expensive, sometimes very expensive. Good in-premises point of sale systems can cost over $10,000. If you’re new to the retail business and trying to make ends meet while getting your first outlet started, that’s a scary amount of money. It’s all very well to know that you’ll get a return on the investment over time, but wouldn’t it be great not to pay out so much in the first place?
Good news. There are ways in which you can reduce your initial equipment expenditure. This article explores the five possibilities to save some money:
1. Buying a hardware bundle
2. Buying budget equipment
3. Buying used POS equipment
4. Signing an agreement with a credit card processing service
5. Using a SaaS provider
Buying a POS Hardware Bundle
Many POS vendors give you the option to buy components packaged together in a POS hardware bundle. You can save some money this way because hardware bundles are usually sold at a discount, so you pay less for each component than if you bought it separately. Another advantage of buying a hardware bundle is compatibility. You know that all the individual components should play nicely with each other.
Budget POS Equipment
It is possible to find budget POS equipment, but know that this equipment will be built to a lower standard than the components in higher end systems. If you are just starting a small retail business with few employees this shouldn’t be of big concern. One of the biggest differences between the higher and lower end equipment is how durable it is. The more staff you have, the more abuse POS equipment is likely to take. If you’re just starting off and will be doing most or all of the handling, you should be OK.
Used POS Equipment
Purchasing used POS equipment will certainly save you quite a lot, but it’s not without risk. If you are going to take this option, try to make sure you buy from a reputable dealer and that there is some kind of warranty on the equipment that you buy. It’s very possible that the components you purchase have withstood years of being mishandled, so make sure it’s good quality kit from a respected brand, such as NCR.
On the plus side, it’s possible to get some really good deals by shopping on the used equipment market. Sadly, many retail businesses just don’t make it in today’s harsh economic climate and go out of business within a couple of years. This means there’s often some second hand POS equipment for sale that hasn’t seen too much use.
Sign a Credit Card Processing Agreement
If you enter into a contract with a credit card payment processing service you can often get your entire POS system, equipment and all, completely free. Well, it’s not completely free, but you don’t pay anything up front except perhaps some shipping. The catch is that you will be tied into the contract for several years and, during that time, the processing service will take a cut from every credit card sale you make. Over the long term, you may end up paying more for the POS equipment than if you’d bought it outright.
Still, if you’re looking to reduce cash outlays while starting off, this could be a worthwhile tradeoff, and a side bonus is that you’re ready to start accepting credit cards as your processing is already in place.
Use a SaaS POS Solution
In recent years, software as a service (SaaS) has begun to pave the way in POS solution development. Apart from offering advantages to retailers in terms of reliability and functionality, many of these service providers will lease hardware to you as well. By signing up for the software service payment plan, you get access to the software solution and can usually lease a POS hardware bundle on which the software will run. This option saves you the expense of buying hardware. Not only that, the equipment lease will often include breakdown protection, all covered by your monthly payments.
If your retail business is very small and you are an iPad owner, or don’t mind purchasing one, it’s possible to sign up for to an ecommerce platform with POS capability. You use your iPad as the POS interface and to handle your sales transactions in-store. Meanwhile the POS solution is totally cloud-based and ties into the ecommerce platform, making it possible to sell your products online as well as from your retail premises.
Before reading this article, you may have thought your POS solution was going to cost you the earth and take a big chunk of your start-up capital. Now you are 5 ways wiser. It’s just a matter of choosing whichever you think is the best option for saving money on your POS equipment to meet your business needs.