Initially, Point of Sale (POS) systems may have been considered a luxury, but now they are becoming a necessity, regardless of the size of business. An effective POS system offers multiple benefits, from easy and secure transactions to inventory management, customer relationship management and advanced analytics. As your business grows, the POS system can grow along with it, with a few minor upgrades.
A POS system is an investment that has significant payoffs in the long run. Whether you are planning on buying your first POS system, or are looking to upgrade an existing setup, budgeting is important. By understanding the costs involved and POS pricing, you can plan financing accordingly and choose the best POS setup for your needs.
When you are considering any POS system, there are primarily two types of costs that will be involved: hardware costs and software costs. Based on the type and size of the business and your needs, the hardware and software costs will vary. For example, a single register POS, initial setup can cost around $1,500, with annual costs in the range of $1000.
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This blog gives you a general overview of how much POS systems cost and what you can expect when it comes to pricing.
Type of POS System Required
Nowadays, you can easily find POS systems available in a variety of price points, to suit a range of budgets. So, how do you know how much you need to spend on a POS? These are some factors to consider:
- Size of Business: A key factor affecting the cost of a POS system is the size of business it needs to cater to. Consider how many check out points you want to support. Also, is the business only available in offline mode or is there an online interface? The size of business will help you decide how much hardware is required to equip each checkpoint and what bandwidth support the software should have. The larger the business, the greater the expense. For example, a smaller business can expect a monthly cost of $99, while larger businesses may shell out $129.
- Industry: POS systems are further available in a specialised format to match the industry. There are different POS for retail, restaurants, even hospitals and for hospitality companies. Based on the specific needs, the POS can monitor orders placed, ingredients, inventory, customer loyalty programs, durations of stay, employees and more. Simple retail businesses will have more affordable POS systems, while more complex restaurants will require elaborate and expensive POS.
- Features Available: There are numerous features that are supported by modern day point of sale systems. Do you want to only record basic transactions or do you want more elaborate marketing support? Are there loyalty programs and coupon systems you want to incorporate. Should the POS be compatible with other business apps? Minimal simplistic features will be a lot more affordable as compared to more complex features.
- Usability: Some POS systems are more complex than others and will require extra training for the staff, while other POS systems may be simpler to use. Consider the staff that will be operating the POS. If many people are expected to operate the POS, a more user-friendly setup would be beneficial. On the other hand, if there are only going to be a few designated staff members, you can explore complex POS systems.
- Potential for Expansion: When you deliberate on which POS system to invest in, think about the expansion plans for your business. In the next five years, are you planning to expand in terms of products? Will there be more checkout points or even new branches? If you have firm expansion plans, it’s a good idea to invest in a POS system that can support growth.
POS Hardware Costs
For any POS system, whatever type you choose, you will need an initial investment for the point of sale hardware equipment. This includes the basic register where the POS software will function, tablet or other monitors, a cash drawer, bar code scanner and any other payment modes desired.
It is important to choose hardware that is compatible with the software you plan to buy. Often you can find bundle packs of all the hardware equipment for a particular software available from $1200 and up. Another option is to buy each of the hardware pieces individually so that you have greater control on the complexity level of each item. For a larger business where you need multiple monitors, scanners, and receipt printers, the hardware costs can cross $2,500.
Here are the basic hardware components you will need:
- Register or Operating System
A POS register is entirely different from an old-fashioned cash register. These POS registers act as the operating system where the POS software can be installed. For a register, you can use any variety of tablets, computers, touch screen integrated terminals, laptops, or iPads. Tablets are more cost-effective as compared to laptops and easier to manage when multiple check out points are required. The cost for a tablet is approximately $350 while a laptop would be around $1000. For multiple checkout points, consider refurbished tablets for more cost savings.
If you opt for a POS operating system without an integrated touch screen, then you would need a separate monitor to act as the POS interface. The monitor will then display all the transactions and activities of the POS system. A separate monitor is especially useful if you want a specific screen size or if you want mobility for the interface. There are dedicated POS monitors available as well, with the costs starting from $539.
- Barcode Scanner
At each checkout point you will also need a barcode scanner which will read product codes and draw up the details on the register. A barcode scanner helps speed up checkout and also helps keep track of inventory and sales. There are desktop barcode scanners and handheld as well. The scanner can be connected to the POS terminal through cables or Bluetooth. The cost for barcode scanners is generally between $100 and $400.
- Cash Drawer
Cash still remains one of the most popular payment methods for customers around the world. As a result, it is important to have a cash drawer to store and dispense cash for any transactions. A suitable cash drawer would have sufficient security measures and make it easy to give accurate change as required. Similar to other POS hardware components, a cash drawer can also be connected to the register with a cable or through Bluetooth. For a standard cash drawer, cost ranges between $78 and $150.
- Card Payment Terminal
Electronic payments are fast becoming the norm for many customers, as they are easy, convenient and fast, avoiding the need to dealing with cash and change. Accordingly, having an electronic funds transfer (EFT) at the point of sale is required. An EFTPOS terminal reads credit/debit cards and allows carrying out of payment transactions.
These days you can also find EFTPOS terminals that read swiped cards and chip cards. There are also readers that work independently while others need to be connected to the POS network. A reader that connects with a POS network is more affordable than independent versions. With the growing popularity of chip card payments, it is advisable to get a EMV-compliant card reader. Depending upon the functionality, the card payment terminal can cost from $59 to $150. Many merchants also get card terminals from their banks and the cost could be dependent on the package they subscribe to.
- Receipt Printer
Despite the prevalence of digital receipts, having a receipt printer is still an important part of a POS setup. A printed receipt is a physical record of the transaction and can include details about the product, any discounts and even the employee processing the transaction. Apart from serving as a record, a receipt is useful if in case the consumer seeks a return or exchange in the future. A physical receipt also helps in the branding of the business, making it memorable for the consumer.
There are two types of receipt printers available, thermal printers and impact printers. Thermal printers are great for high volume printing as they are fast and cheap, however, they are not suitable for warm environments like kitchens or outdoor use. A more traditional option is an impact printer which is suitable for all weathers. Thermal receipt printers are available from $250 to $700, and impact receipt printers start from $399.
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- Additional Equipment
As per your requirements, you can further add on to your POS network with hardware items like weighting scales, self-service kiosks, and extra monitors.
POS Software Costs
Apart from the one-time costs in setting up the hardware for your POS system, there are additional costs for the POS software. Without appropriate software, the POS setup cannot come to life or bring you the desired benefits. The POS software costs depend upon multiple factors, and so you should choose a software plan that best matches the needs of your business.
The type and number of POS features that you want to support will have a major impact on the software costs. Basic forms of POS software will carry out all the transactions with ease. However, if you want additional analytical reports, sales tracking, employee tracking, customer relationship management, inventory management or any other forms of data calibration, be prepared to pay extra.
- Number of Terminals Supported
Any point of sale that is setup, will require POS software. As a result, the number of terminals or check out points that you want to equip will have a direct impact on the cost of POS software. Typically, up to 3 terminals are supported with basic POS software, and you can opt for larger packages for more terminals. Also, if you want to combine offline sales with online sales through a single POS system, you can expect more costs for the POS software.
- Hardware Compatibility
For a successful and effectively functioning POS setup, it is vital that the hardware and software be completely in sync and compatible. Whether you are buying new POS hardware or already have equipment, make sure that the POS software you invest in is compatible with the hardware. For more extensive hardware systems, there can be a corresponding rise in cost of software.
- Payment Model
Traditionally POS software were available in a licenced format which involved an initial one-time purchase of the software. Any further upgrades would also have to be paid for. These days, the cloud-based POS software are more popular. These are accessed online entirely and come with regular updates without additional charges.
In the cloud-based software, there is a subscription fee which can be billed annually or monthly. The monthly fee for cloud-based POS software ranges from $50 to $300, depending on the size of the setup, features and complexity.
- Additional Costs
Although not exactly a part of the POS system itself, you will also need to consider the costs for payment processors. These are third party services that facilitate electronic payment and generally take a cut from the payment. Some POS software providers also offer payment processing, again taking a cut from each transaction, for example 2.4%. In cases where a cut is taken from transactions, the POS software provider will often forego monthly subscription charges.
A point of sale system may involve an investment, but its benefits will provide you with value that is multi-fold. The popularity of POS systems has made it possible for there to be setups available in a variety of price points. Whether you have a small budget or are looking to splurge, you can easily find a POS system that matches your needs.
The POS Plaza team is ready to help you in defining your business needs from a POS system. Furthermore, we guide you in comparing POS hardware and software options so that you can find a solution that matches your needs and fits your budget.