Click to Print

The Benefits of Cloud-Based Point-of-Sale Systems

January 2, 2013
URL: http://www.entrepreneur.com/article/224961

Q: What are the advantages of switching my POS system to the iPad?

A: There has been a lot of discussion among brick-and-mortar merchants over the advantages of switching from the traditional in-store point-of-sale system to a cloud-based version that can be run from an iPad or other tablet or mobile device. For help weighing the benefits, we spoke with Jason Richelson, founder of New York-based ShopKeep POS, a cloud-based system. Naturally he's a huge proponent of the approach. Here, he outlines his top three justifications for converting to the cloud and details the costs and logistics involved.

Give us your elevator pitch. What are the key benefits of cloud-based POS?
First there's data access. The best cloud-based services have iPhone apps with live sales data at your fingertips, and all of them run web-based reporting that lets you manage your store's POS from anywhere. Next are instant upgrades. Your cloud-based POS provider keeps you on top of new technologies and of security requirements you'll need to implement over the next few years. Finally, I'd say easy integration. Loyalty programs, gift cards, payments and rewards all seamlessly integrate into cloud platforms. Not so for many Windows-based POS setups.

OK, but when does it become worth it to chuck my old system?
Most businesses have a change of heart when they experience a virus on their Windows-based POS system. The cost to reinstall Windows, their POS and drivers is just too much, so they look for options. Also, in two years time, it is anticipated that Visa, MasterCard and American Express will take responsibility for the cost of goods bought with stolen cards, but only for merchants that use the newest technology for card acceptance--so you're going to want to upgrade soon, anyway. That technology is already included in today's cloud-based POS, since technology upgrades are part of the software-as-a-service (SaaS) model.

How does the cost of cloud-based POS compare to that of traditional systems?
Traditional POS systems typically charge you a software license fee per register and then a yearly maintenance fee of 18 to 20 percent for upgrades. And it's rare for support and training to be included in this price. The problem with this model is that if you're unhappy with your purchase after, say, a month, you're out the full cost upfront.

SaaS is more of a partnership model in that you pay a monthly fee only and nothing upfront. If you don't like what you got, you can cancel at any time. These monthly fees cover software, support, backups and future upgrades. There shouldn't be any surprise charges in the future.

How hard is it to migrate to a cloud-based POS system?
Migrating from any POS to another can be difficult, but the best way to convert is to export your entire inventory and customer information to a spreadsheet and then send it to your provider. Any good cloud POS company will import those items into your new account for you as part of setting up your account, so you can be up and running quickly. And they shouldn't charge you extra for it.