What do you do when you see a saleable commodity, and it touches your heart? Or, you may have to buy something of significance. Generally, the purchase decision is a process that includes many steps such as product evaluation, product comparison, benefits analysis, etc.
Let’s say you finally made a decision to purchase that specific product or service. You will only be able to get ownership of that product after paying for it. That means the payment is the gateway for the ownership of that product or service. In business terms, that gateway is referred to as the “point of sale.” The term may look simple, but there is so much more you can learn about it in this article.
What Is Point Of Sale (POS)?
So, in formal terms, we can define “point of sale” as the strategic location where business transactions take place. Generally, this strategic location includes virtual payment gateways, checkout counters, etc.
In simple words, a point of sale is a business location where customers pay for the products or services they purchase. A point of sale can be a physical place such as cash or checkout counters. Similarly, it can be a digital or virtual payment gateway which is very common in the eCommerce industry.
Point Of Purchase Is Not The Point Of Sale
Generally, customers think that the point of purchase and point of sale are the same terms. How? According to customers, the point of purchase is a location where they make the purchase as well as the payment.
However, in marketing terms, the point of purchase is the area surrounding the payment/checkout counter. That said, point of purchase is a place where the customer finalizes its purchase decision. Common examples of point of purchase include shelves or racks in brick-and-mortar stores or product galleries on online stores.
Benefits of Point of Sale (Pos) System for Small Business
Some of us may think how a point of sale can be so important or beneficial for a small business or any business because it’s just a place for payment for products or services. Well, the benefits of an effective POS system for small businesses can prove us wrong.
Time Saving For Administration
An effective and easy-to-use POS software can make things easier for the administration. For instance, it can be helpful in evaluating the product performance and help management make necessary adjustments if needed. Moreover, if a business has a streamlined POS system, the administration will have more time to work on other vital issues.
Modern-day business practices require small business owners to have instant access to their operational and financial data. That’s why it has become necessary for them to be able to access their POS system instantly when they are traveling or working from home.
Moreover, where customer service is necessary for large businesses, it is even more crucial for small businesses, and instant access to the POS system helps small businesses to offer better customer service.
Improvised And Personalized Marketing Campaigns
Your POS system can also help you in running effective marketing campaigns. That is because it gives a clear picture of your business activities and enables you to identify “more profitable” customers. That way, you can improve your personalized marketing campaigns to maximize your profits.
Better Stock Management
They say you need to be at the right place at the right time. Similarly, small businesses need to make sure that they have enough right stock at the right time and place. In short, small businesses need to have a good stock management system. Generally, inventory management software is a built-in feature of a good POS system.
When you have accurate customer behavior data and an effective stock management system, your business will see more gains in terms of profitability. Customer behavior patterns help you run better marketing campaigns, while stock management ensures your customer leaves your store with everything it needs.
Common Types Of Point Of Sale (POS) Hardware
Different businesses use different types of POS hardware, but here are some of the most commonly used hardware:
- Register. A register can be a monitor or any visual screen with which you can calculate and process any sale transaction.
- Connected Device Such As Tablets. Businesses also use iPads or other tablets as a replacement for monitors. You can prop up a tablet with a stand to regulate the process.
- Credit Card Reader. People mostly prefer cashless payment methods, and they generally pay via credit cards. That is why a card reader is an essential part of POS hardware. Moreover, it is better to use a card reader that accepts as many or at least common contactless payment options, such as a chip card, Apple Pay, or magnetic (magstripe) card.
- Cash Drawer. Many customers also prefer cash payment, and if a business accepts cash payments, it needs a safe option for storing cash. These cash drawers are mostly interlinked with the POS software as it minimizes any chance of fraud.
- Bar Code Scanner. Digitalization has allowed businesses to keep a digital record of every item they sell. Every product has a bar code that is scanned by a bar code scanner. This not only double-checks the product price but automatically updates inventory levels.
- Receipt Printer. A receipt printer prints a receipt (a physical record) for the amount paid by a customer for purchasing a product.
Common Features Of POS Software
Businesses use different POS software with various features according to their business nature or needs. However, these are some common POS software features that almost every business uses.
- Payment Processing. It is the first and an integral part of every POS software because the POS is a location where businesses get paid for their products or services. Generally, any POS accepts different payment forms such as cash, chip cards, Magstripe credit cards, secure online payments, contactless payments (e.g., Apple Pay, Google Pay), etc.
- POS Reports. These reports are a true depiction of where your business is heading. That means how much you are selling and the revenue you are generating or which product has higher sales volume and vice versa. These reports then help you to remodel your marketing strategies.
- Inventory Management. Inventory management is also a common feature in POS software. It gives accurate information about your stock position so you can take timely steps, i.e., when to get more stock of a specific product, etc.
- Receipts. Wherever there are payments, they will accompany receipts with them. Receipt not only works as a record of a sale transaction, but it also makes refunds easier. Moreover, receipts are actual sales figures for the business.
- CRM (Customer Relationship Management). Modern POS software also have a built-in CRM tool that helps businesses to know their customers better. CRM tools provide information about customers and their purchase behaviors. This ultimately helps businesses to target their customers with better personalization.
- Workforce Management. Team management software helps the owners to stay updated about their employees and their performance. Moreover, this software also allows you to regulate employees’ access to specific resources or data.
- Digitalized Tipping. Giving a tip to employees in restaurants, hotels, and similar businesses is an important part of almost every culture. Modern POS software also allows the customer to give a digital tip while making the payment.
Point of Sale System Examples
The basic theme of a POS system is to regulate the transaction process with as many possible features. However, the latest POS systems have more value-added features that help businesses with other things as well. Here are few examples of some of the best available POS systems.
Square – The Best Fit For ALL
If there is any POS system that has everything a business needs, then Square will definitely be the top priority for everyone. Square POS system has pretty useful features, services, and price ranges according to your need.
Moreover, iOS-developed Square App is also available for end-users, and that too free of cost. It helps businesses manage their sales as well as purchases. Here are some worth mentioning features of this POS system:
- High performance
- Limited access for employees
- In-depth analytics and reports
- Detailed customer profiles
In short, it is a highly effective, cost-effective, and premium quality product for businesses.
Shopify – Making eCommerce Easier
A POS best suited for eCommerce businesses, Shopify has made things extremely easy for eCommerce-based stores and retailers. Businesses also get their online stores with their POS package. Moreover, a business can have better social media reach and online product management.
Here are some features of this full-of-value POS system:
- Employee profile management
- Daily and weekly analytics
- Awesome discount offers and codes
- Purchase and sale inventories
- Mobile application (totally free) available on Apple store
- Live customer support system via live chat, phone, and emails.