Investments in POS: How to Ensure a Great ROI


In today’s climate, merchants are faced with migrating from a cash register to a computerized point of sale (POS) system, or upgrading from an antiquated POS system to a current state-of-the-art POS system.  Does the decision represent a significant cost or a wise investment?

It really depends on two issues. One is the perception of the merchant making the decision. The second is the performance of the vendor whom the merchant decides to engage for a POS system. Those two issues can be debated from many angles. So, let’s break it down to simplest form by definition.

The definition of COST is an amount that has to be paid or given up in order to get something.

The definition of INVESTMENT is the investing of money or capital to gain profitable returns or appreciation in value.

POS systems, POS vendors and POS Resellers come in every shape and size. It is typically top priority for the merchant to find the system that provides the best operational fit at a price they can afford from a vendor they can trust. Those three items add up to the merchant’s perceived value in the POS investment. However, with those three criteria, is the merchant viewing the POS system as a “cost” or as an “investment?” More importantly, is the vendor providing the POS solution viewing the newly acquired merchant as a “new win” or as a “new Partner?”

It is a two-way street and should be treated as such by both parties. Specifically, the merchant should consider how much risk is involved, just like he or she would do with an investment in inventory, marketing or human capital. The POS vendor should allow for the merchant to make this decision without a significant risk, while at the same time providing all the evidence necessary to make sure the new partnership is a good fit and a “win” for everyone involved.

As with any buy/sell situation, the onus is primarily on the buyer. It’s all about risk and reward. So, merchants should ask themselves the following PPS_OysseScreenShot_75questions prior to making the decision to purchase their first point of sale system or upgrade their existing POS system:

  • What is the risk involved? Could I possibly spend a bunch of money and gain very little?
  • What is the reward involved? If I spend $x, what is my opportunity to gain $x as a direct result of the initial spend?
  • Will my investment continue to grow over time? Is the vendor committed to research and development?
  • Am I losing money because I have not made a decision?

The bottom line is still the bottom line. That is why we all do what we do. So, deciding on a POS solution is just like any other business decision. The result of the decision needs to increase the bottom line through:

  1. Gained Efficiencies (speed of service)
  2. Reduced Losses (inventory and pricing controls)
  3. Increased Repeat Revenues (targeted marketing based on POS data)
  4. Low Risk (little-to-no upfront investment or commitment by merchant)
  5. Shared Goals (partnership between merchant and POS vendor focused on growth)

If a merchant can find these five attributes in a POS solution, I feel it is safe to say the merchant has found a wise POS investment in place of what is often misconstrued as a significant cost.

For more tips on seeking POS solutions, visit the POS Software Blog at the POS Prophet Systems website.



About POS Prophet Systems

POS Prophet Systems (PPS) offers affordable, easy-to-use software solutions for retailers and other small businesses. PPS solutions include point-of-sale, inventory management, high-speed credit card processing, e-commerce applications, CRM, marketing tools, fully-integrated gift card and loyalty programs, and accounting systems. Services include professional training, full-service implementation, data conversion, live support and business application consulting.  

About the Author:

Sean Connors is the President of POS Prophet Systems, Inc.  He has 13 years of experience in the deployment of POS systems for specialty retailers.  He has a Bachelor of Science degree in Communications Media from Indiana University of Pennsylvania, is the husband of Patty Connors, and the proud father of Jack and Grace Connors.

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