How Can a Point-of-Sale System Help Your Business?

That in-store self-serve cashier station is not just a way to keep customer lines short – it’s a vital part of running a business.

Indeed, point-of-sale (POS) terminals do much more than ring up sales. They can also connect to and support back-office systems, aiding in such functions as monitoring stock levels, collecting transactional data, and tracking employee hours.

A POS system includes both hardware – the sales-checkout terminal with scanner, barcode reader, and receipt printer – and the software that runs those components and parses the resulting data. Some businesses acquire each component separately, though many simplify the process by picking an all-in-one system that includes everything needed.

5 Types of POS Systems

A POS system can be fixed, like a traditional cash register, or mobile, like a handheld scanner. Like most technologies, POS systems can be adapted to work in a variety of channels and modes of operation. Five of the most common types of POS systems are:

1. On-Site Terminal

This is the traditional POS system, which connects an in-store, permanently placed terminal to a company server. It’s also a very secure option because all information is stored on the company’s internal network.

2. Mobile

Businesses that are on the go – for example, food trucks and pop-up retail stores – often rely on smartphones or tablets as their checkout stations, often in conjunction with card readers and receipt printers. While a mobile POS may lack some of the more powerful features found in other systems, it does offer a low-cost option.

3. Cloud-Based Terminal

Like the on-site terminal, a cloud-based sales terminal is in a fixed location, but its data is transmitted to a server in the cloud. This saves a business the expense of purchasing, maintaining, and updating an in-house server.

4. Online

An online POS combines some mobile POS and cloud-based system features. The retailer uses its own mobile devices to record sales, as well as a cloud-based service to store its data as needed. This is a low-cost option that provides flexibility for mobile operations, but features may be limited.

5. Self-Service Kiosk

The self-checkout POS option has caught on among larger retailers, reducing the need to hire so many cashiers and, in turn, cutting costs.

Like most technologies, POS systems can be adapted to work in a variety of channels and modes of operation.

How to Choose the Right POS System for Your Small Business

As with most technology decisions, selecting the right POS system for your business depends on the company’s unique needs. Here are a handful of key questions to consider during the evaluation process:

What kind of business are you running?

A vendor selling products at different trade shows, for example, will likely require a flexible mobile or online POS system, while an established brick-and-mortar business is apt to lean toward a stationary system that’s user-friendly and secure.

How will the POS system affect the customer experience?

A self-service POS should let customers pay for their purchases and leave your store more quickly than if they had to wait in line for a cashier to check them out. But if the POS isn’t user-friendly or malfunctions, it can result in an unpleasant customer experience that can hurt future sales.

Can the system help manage operations?

A solid POS system should integrate with inventory-, payment-, and vendor-management systems.

Can the system grow with your business?

The POS system you choose should be able to scale as new locations and sales channels are added. Training new users should also be simple.

Examples of Popular POS Systems

The market for POS systems is expected to grow from just over $22 billion in 2021 to almost $71 billion by the end of the decade, according to a market research report published by Fortune Business Insights in July 2022. Most POS system vendors charge their business customers a monthly or annual fee, plus an added charge based on the percentage of sales processed. And as more vendors enter the space, narrowing the choices becomes increasingly complicated.

However, a handful of vendors surface consistently in the top industry rankings of POS systems popular with small businesses. They include:

Square

One of the earliest mobile POS systems, Square has expanded since its 2009 launch to include a variety of integrated options, including inventory and staff management, loyalty programs, and professional services. A free subscription plan is available, not including processing fees.

Shopify

Another early adopter, Shopify started as an e-commerce platform in 2006. It has since expanded to offer in-store terminals and hardware, as well as back-office solutions and a payments provider for in-store and online sales. Its basic plan starts at $29 a month.

Vend by Lightspeed

Lightspeed launched a cloud-based POS system in 2013. With its March 2021 acquisition of Vend, a retail POS platform aimed at small and midsize businesses, the company rebranded its offering to Vend by Lightspeed, which is now in use at 20,000 locations worldwide. Plans start at $69 per month.

Clover

Clover offers all-in-one hardware and software packages with cloud-based data storage. Its plans target different sectors, including retail and professional services. Clover charges a startup fee and monthly fee, depending on the type of business and volume.

Revel

Revel offers an iPad-based POS system with cloud storage, as well as other hardware, such as self-service kiosks. Software pricing starts at $99 a month.

The Takeaway

Point-of-sale systems have evolved beyond mere cash registers. They’re now powerful business solutions that go beyond simply handling payment processing. Businesses have a variety of modern POS systems from which to choose. To make the best choice for your business, take time to evaluate your specific needs beyond basic functionality. 

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