POS is an acronym for point of sale, which is a form of retail transaction. A POS system is a sophisticated computerized cash register system, and is widely used in most transactions of this type.
The cost of a POS system is based on the type of system and the amount of customization and features. The amount you spend on a POS system should be in direct proportion to the amount of revenue that your company generates. A POS system that is customized, programmed, and installed, costs between $2,500 and $6,000 each.
Return On Investment
A POS system or terminal purchased from a store without programming, customization, or installation costs between $1,000 and $3,000 per terminal. The cost for multiple terminal purchases made at one time runs less.
The return on investment (ROI) is identified over a period of time and is based on the amount and type of customization and features for the terminal.
POS System Design
One of the primary purposes of a POS system is to increase efficiency and productivity. A POS system should result in better price controls, information collection, and data analysis.
An effective POS system will increase profits and reduce expenses. The more data collected by the POS system, the more the terminal will cost. POS systems also track inventory carefully and can be programmed to place orders on items that are selling faster than anticipated.
POS System Accuracy
POS systems are more accurate than sales personnel. Some POS systems can be programmed, in a matter of seconds, to reflect a lower or higher price. POS systems that are programmed to network with other terminals cost more than a non-customized system. Terminals connected with POS systems at remote locations also cost more.
Some POS systems can be programmed or customized to reflect price changes, and implement those changes in terminals at all selected locations.
Plan to spend more on a POS system that generates itemized sales reports, as well as higher margin reports on products that are selling well. Additionally, some POS systems can be customized to ensure that popular items are never out of stock. Accurate inventory tracking is yet another feature of a POS system that increases the cost of a basic terminal.
Knowledge and Profits
Some POS systems generate a report --on demand-- that identifies the amount of cash that should be in the terminal, the number of credit card transactions, and how much of those sales are profit. The cost of the POS system that produces detailed reporting on sales and profit is more expensive than a POS system that reports sales only.
Customer contact information can also be collected and analyzed by a customized POS system. Lower cost terminals purchased off-the-shelf do not collect this level of information, such as the names and address of new and existing customers.