For a retailer, the ka-ching of the cash register is a joyous sound. However, today’s cash register is not the same as the old cash registers from the past. Modern cash registers may be attached to a “point of sale’ system which is connected to your computer. Retailers prefer these systems to standard cash registers because they do much more than just ring up purchases. These cash registers can provide you with real-time data about your customers and inventory.
The core component of these systems is a standard issue computer with specialized POS software installed on it. You must also have a receipt printer and cash drawer. You may also have a credit card reader and bar code scanner. These systems are sold pre-configured by vendors with the ability to expand the system as your business’s needs grows. The cost for a typical setup is less than $1,500.
If you have a large inventory, then you will need to create SKU numbers for your stock. For example, a boutique clothing store may have thousands of SKU numbers for their products. Many shops have large inventories since some sell everything from cameras to cosmetics to bicycles. It can be difficult to keep track of the thousands of items a small business has in their inventory.
However, if you are able to keep track of the hard-to-find fast-selling items in your inventory and keep them in stock, you might have a competitive advantage over a larger competitor. So, how do you strike the balance?
A good POS system can help keep you alerted to low inventory items. Then you can determine when to re-order. When the time comes to re-order, some POS systems will let you know the most recent price you paid and the average price you paid in the past. These two prices can help you strike the best price deal with your suppliers. During your off-hours, you can run reports that show the inventory activity for the day, week, or month. If you need to view the big picture of your business, some systems allow you to track your annual inventory and compare it to last year. This can help you anticipate your inventory needs for the coming months.
Taking inventory is not only time consuming, but it is also labor-intensive. It’s also one of the most crucial tasks facing a store owner.
Too much stock and too little can cost your business money. U.S. retailers lost $224 billion due to surplus inventory, according to the National Retail Federation. Another $45 billion is lost by a lack of inventory in stock.
In addition to managing your inventory, a POS system can also help you determine who your best customers are and what they like to buy. You can have your customer’s purchase history available at the cash register. This can help a salesperson or business owner, alert the customer to new products or shipments. For example, a nursery owner might notify a customer who buys tea roses each year about a shipment of the flowers they have coming in. A camera store salesperson can alert a person interested in wildlife photography about a new high-speed camera lens that is ideal for capturing raptors in flight. An auto parts store cashier could use the barcode scanner on the POS system to answer a customer’s questions about the availability of a spare part.
It comes down to this: A well-run business needs to have a cash register that does more than just take in money. The right equipment you can have a strategic device center, a system that will help your business grow and keep your customers coming back. The ka-ching will keep coming.
By using an integrated, affordable POS system, a retailer with an annual revenue of $300,000 can cut their costs by as much as 10 percent, according to Intuit market research. That’s an annual saving of $30,000 per year. That’s a substantial return on your $1,500 investment. How can you not afford a POS system?
Shopping for the Right POS System
You have many options when shopping for a POS system. The price can range from hundreds of dollars to tens of thousands. The final decision can be difficult, so here are some guidelines you can use to make a decision.
Inventory is the most important. All POS systems are able to ring up purchases and track inventory. However, a good system will let you evaluate your inventory. You can set up alerts for items that are running low, quickly add new items as you receive them, account for back-ordered items and create purchase orders to be sent to vendors.
Weigh the systems ease-of-use against the functionality. The more complex your customer orders are, the more features your system should have. You also need to consider the time you will have to spend teaching your new employees to use the system and bring them up to speed. The best system offers a balance of both. Additionally, take maintenance into account. This page on Symbol maintenance gives an idea of what’s involved – needless to say maintenance depends on the specific system.
If you look for a system that can grow with your business’s needs. If you are working on a tight budget, then you can start with a basic POS system which is the software running on your PC with a drawer and receipt printer. Then, you can add to the system as needed, you may choose to add a bar code scanner or credit card scanner. Later you can add a pole display, inventory tag printer or PIN debit pad. By picking up a system that meets you need, you will eliminate the need to have someone set it up for you, which can add thousands to the system’s cost.
Point-of-Sale System Basics for Retailers
