By now, you’re probably acquainted with the concept of a Point of Sale (POS) system. For the majority of contemporary retail businesses, a POS system serves as the central hub for inventory management, staff supervision, customer checkout, payment processing, and the transfer of funds to your bank account. It essentially functions as the mission control center for your retail store.
However, it’s important to note that POS features can differ significantly from one provider to another, and so can the associated costs. Questions such as the expenses for POS terminals and hardware, software costs, and potential payment processing fees often arise.
The process of shopping for a suitable POS system can be quite cumbersome. Hidden costs, setup fees, and ambiguous pricing structures can make it challenging to discern precisely what you’re committing to.
POS systems entail both fixed and variable costs, with pricing being contingent on various factors, including your chosen provider, business type, the number of stores and employees, and the specific features you require.
Before making a decision on which POS system is the best fit for your needs, let’s delve into the elements that impact the pricing of POS systems.
“What Is the Price of a POS System?”
On average, the initial expenditure for a POS system can span from $0 to $2,000, encompassing expenses related to hardware, software, and installation. Subsequently, your annual expenditure for utilizing the POS system may range from approximately $500 to $1,000, contingent upon factors such as the scale of your business, the number of retail outlets, supplementary features, and sales volume.
Pricing structures differ among various POS providers. Some extend complimentary subscriptions, while others offer paid subscriptions with more advanced functionalities, or they establish customized pricing tailored to individual businesses. In cases where the POS provider includes integrated payment processing, there may also be transaction fees levied per payment processed.
It is essential to be mindful of transaction fees as they constitute a significant variable cost. Certain POS systems with integrated payment processing impose fees based on a percentage, a flat-rate structure, or a combination of both. The extent of your monthly expenses will depend on the types of payments you accept and the volume of transactions conducted through your POS system.
“Three Key Factors That Influence the Costs of a POS System”
- Software
Typically, most point-of-sale software options offer subscription models, which can be billed either on a monthly or annual basis. These subscriptions often come with varying tiers at different price points. More expensive software plans tend to provide access to more advanced features.
For instance, consider an ecommerce vendor on Shopify’s Basic plan. They receive Shopify POS software as part of their package, which is included in their plan cost ($39 per month or $29 per month with annual billing). This software equips them with the necessary tools for occasional in-person selling, such as at pop-up shops or events.
Conversely, retailers operating permanent brick-and-mortar stores with a need for more advanced features like comprehensive reporting and analytics or heightened control over staff and user permissions can opt for Shopify POS Pro. This premium package costs $89 per month (or $79 per month with annual billing) per store location.
- Hardware
One of the initial decisions to make is whether to opt for a traditional POS system or a mobile POS (mPOS) system that can be installed on iOS or Android tablets or smartphones. Mobile POS systems offer the advantage of compactness, occupying less counter space and providing the flexibility to assist customers throughout the store. Some mobile POS stands even feature a swivel function to position the tablet screen toward customers, enhancing their interaction (commonly referred to as a customer-facing display).
Alternatively, you can consider an all-in-one point-of-sale solution Go, designed for efficient in-store transactions with a compact device. POS Go incorporates a built-in barcode scanner and card reader, eliminating the need for additional hardware.
Cash Drawer and Card Reader
While contactless payments are gaining traction, a significant portion of retail transactions, approximately 61%, still involves cash. Therefore, investing in a cash drawer and a versatile credit card reader capable of handling tap, chip, swipe, and PIN payments is prudent. This ensures that you can accommodate all payment methods and secure every sale.
With Shopify, cash drawers are priced between $139 and $159, while Shopify’s card readers are available at $39 or $49, depending on the selected model.
Receipt Printer
A survey conducted by Green America revealed that 89% of U.S. consumers prefer retailers to offer both printed receipts and digital receipts sent via email. With this preference in mind, it may be advisable to acquire a receipt printer and the necessary printing paper to provide shoppers with their preferred proof of purchase.
Depending on whether you opt for a Bluetooth, Wi-Fi, or wired receipt printer, the cost may range from $289 to $399.
Barcode Scanner
Consider the inclusion of a barcode scanner in your setup, as it facilitates customer checkouts, inventory management, and more. However, if you seek a minimalist configuration, note that can utilize your tablet or smartphone’s camera as a barcode scanner, eliminating the need for an additional hardware purchase—just grant the necessary camera access.
The cost of a barcode scanner varies depending on whether you choose a 1D or 2D model, typically falling within the range of $229 to $329.
- Payments
Opting for a system with integrated payment processing streamlines your monthly expenses, enhances the customer experience, expedites payouts, and reduces discrepancies in reporting due to human errors. Integrated payments also translate into less time spent reconciling charges.
Conversely, engaging a third-party provider for payment processing necessitates manual reconciliation of payments accepted through your card reader with your system, potentially leading to delayed payouts.
Prior to selecting a payment processor, it’s essential to thoroughly understand the terms of the agreement, including any long-term commitments or monthly fees. Additionally, ensure that the pricing structure for transactions offered by the payment provider is transparent and straightforward.
Payment Transaction Fees
Payment transaction fees constitute a percentage-based, fixed-rate, or blended fee imposed by the payment gateway provider for processing transactions. Some payment service providers may offer variable transaction fees depending on the customer’s chosen payment method, while others adhere to a fixed-rate model.
Opting for fixed rates offers predictability, consistency, and simplified financial planning. Fixed rates provide assurance when accepting diverse payment methods, eliminating the risk of unexpected surprises in your next payout, regardless of your sales volume.
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