The ultimate guide to POS system costs - have these in mind!

How much does a high-quality POS system actually cost, and what are the main cost drivers? What else should you have in mind to get the most out of your investment? Knowing what your POS system will cost and deliver in the long-term requires a solid analysis. This blog post will take a closer look at common costs, and introduce our cloud-native Hii Retail POS system.

How much does a POS system cost?

A POS system can cost anything from 0$ to thousands of dollars, depending on the software, hardware, vendor, purchase/subscription model and other factors. It is impossible to generalize, as there are so many different options in the market. If you are aiming to grow your retail business, it is important to first-and-foremost think in terms of future ROI.

Some retail companies get the best ROI by using a simple cash register, while others require a modern cloud-native POS to flourish. Your POS should be an investment in future growth that drives development and helps your business stay competitive.

Some common POS costs and what to have in mind

Let’s explore some of the main costs drivers in POS systems. It is important to arrive at a TCO (Total Cost of Ownership), which describes the total purchase price and operation cost. Calculating the TCO will give you a better grasp of the investment and ROI for a realistic comparison.

Costs also depend on the type of POS setup you choose. There are three main types of modern POS solutions:

• Cloud-based/cloud-native POS: hosted on cloud technology and delivered as a SaaS (Software as a Service)

• On-premise POS: system hosted on-premise or on local servers

• Hybrid POS: a combination of cloud and on-premise POS technology

Different POS setups have their upsides and downsides, and it is important to find a solution that matches your business requirements.

Hardware costs

The price of POS hardware differs greatly between setups and vendors, as it can consist of everything from a simple card reader to a full, all-in-one business system. Hardware costs include POS terminals (cash registers, self-checkout kiosks, tablets, desktop computers, etc.), peripheral devices (barcode scanners, receipt printers, cash drawers, card readers, etc.), network equipment (routers, switchers and cables) and associated setup costs.

Software costs

POS software costs include things like licensing fees, subscription fees, customization and integration. Licensing and subscription models vary, and in some cases software and hardware are distributed together. To uncover what is best for your business, it is important to explore the short- and long-term costs and get a full picture.

Payment processing fees

Another important cost driver to consider is payment processing fees. Some examples are transaction fees, monthly fees and setup fees. Payment processing is a running expense with a potentially large impact on your overall investment, so it is good to analyze it thoroughly before making a decision. A few percent here and there may seem insignificant, but in the long run it could make a big difference.

Maintenance and support costs

Operating a POS system requires technical support and maintenance. What are the fees for ongoing technical support, and how much do you need to pay for hardware and software maintenance? In some cases, you might need to pay for updates and upgrades, which is also important to have in mind.

Training costs

Transitioning to a new POS system requires staff training. You might also need to pay for training materials. Investing in staff training is usually worth it, as comfortable employees will use the system more effectively. Choosing a POS with an easy an intuitive user interface will lessen the need for onboarding and recurring staff training.

Other POS costs

Aside from these five main cost drivers, there are also some others to consider. You might have to migrate data, e.g. back up or move existing information from the previous system. Downtime and temporary resource allocations could lower productivity during the transition period. Assuring that the new POS system meets compliance and security regulations could also come with additional costs. Make sure to have these types of additional costs in mind when making your calculation.

What can you do to lower your POS costs?

All these cost drivers have something in common; you can lower them and achieve the best possible ROI by comprehensive analysis and planning. Every business has its unique circumstances and requirements, so it will pay off. If you want to learn more about this aspect, we recommend our step-by-step guide on how to implement a POS system.

Conclusion

Choosing the right POS system for your business requires a thorough look at the cost drivers, so that it truly becomes an investment in the future. It will be worth the effort; when you have the setup in place for your day-to-day operation, it will keep delivering value. If you choose a fully scalable solution, you will never need to change your POS system again.

Introducing Hii Retail

Hii Retail is our comprehensive cloud-native POS built on the Google Cloud platform. Its flexible architecture will allow you a fast time to market and its different channel possibilities will delight your customers, no matter how they do their shopping. Hii Retail offers Scan & Go, self-checkout, mobile and stationary POS options, covering all you need to provide world-class experiences. If you are ready to take your retail business to the next level, why not start today?