Opening a new store is an exciting venture, and selecting the right Point-of-Sale (POS) system is crucial for your success. Your POS system needs to integrate sales, inventory, payroll, online sales, and credit card processing seamlessly, allowing you to focus on running your business efficiently.
Here's a guide on the best POS options for handling these components, along with budgeting for the costs associated with each.
1. Best POS Options for Sales, Inventory, Payroll, Online Sales, and Credit Card Processing
Sales & Credit Card Payment Processing
Your POS system should be able to handle in-person sales, process credit card payments, and support a variety of payment methods (e.g., EMV chip, magstripe, contactless, mobile payments).
-
Best Options:
-
Square POS: Square offers an easy-to-use system for small and medium-sized businesses. It handles sales, payments, and integrates with other business operations like inventory and payroll. Square also supports online sales through Square Online Store.
-
Clover POS: Clover is a versatile system with different hardware options and customizable features. It includes integrated credit card processing, inventory management, and payroll tools.
-
Lightspeed POS: Lightspeed is ideal for both retail and restaurant businesses, with strong sales and inventory management features. It also integrates well with credit card payment processors and e-commerce platforms like Shopify and WooCommerce.
-
Shopify POS: Shopify POS is great for businesses that are also selling online through Shopify. It syncs your online and in-store sales, accepts payments, and helps with inventory tracking.
-
-
Payment Processing Fees:
-
Square: 2.6% + 10¢ per swipe (US)
-
Clover: 2.6% + 10¢ per swipe (for their standard rates)
-
Shopify: 2.9% + 30¢ per transaction (standard for Shopify Payments, varies with plan)
These fees may change based on your monthly plan or payment processing volume, so be sure to review the fee structures based on your business type and volume.
-
Inventory Management
Inventory management is essential to avoid overstocking or stockouts. Many POS systems come with built-in inventory management tools, allowing you to track stock levels, receive low-stock alerts, and manage orders from suppliers.
-
Best Options:
-
Square POS: Square offers a simple inventory management system, allowing you to track stock, set alerts for low stock, and manage product variants.
-
Lightspeed POS: Lightspeed offers robust inventory management with features like product categorization, custom reporting, purchase orders, and inventory tracking across multiple locations.
-
Shopify POS: Shopify integrates inventory management across both your physical store and e-commerce platform, syncing product counts in real-time.
-
Payroll
Payroll integration helps you manage employee hours, wages, and tax calculations without a lot of manual work. Look for a POS system that includes payroll functionality or integrates seamlessly with payroll software.
-
Best Options:
-
Square POS: Square offers Square Payroll for handling employee wages, tips, and tax calculations. It also integrates directly with your POS system, allowing you to automatically calculate employee hours and wages.
-
Clover POS: Clover has Clover Payroll integration, which helps with employee time tracking, hourly rates, and generating paychecks.
-
Lightspeed POS: Lightspeed integrates with third-party payroll services like Gusto, making it easy to manage employee wages, tax reporting, and paychecks.
-
Online Sales (E-Commerce Integration)
Having an e-commerce platform integrated with your POS allows you to manage online orders, sync your inventory between online and in-store sales, and streamline shipping and fulfillment.
-
Best Options:
-
Square POS: Square allows you to create a Square Online Store, which integrates directly with your POS system. This is a great choice for small retailers looking to sell online and offline from a single platform.
-
Shopify POS: Shopify is designed for businesses with an online presence. It seamlessly integrates with your Shopify Online Store, managing both in-person and online sales in one place.
-
Lightspeed POS: Lightspeed integrates with e-commerce platforms like Shopify and WooCommerce, allowing you to manage both online and in-store sales and inventory from a single system.
-
2. Cost Considerations for Your POS System
When budgeting for a POS system, consider both hardware costs, software subscription fees, and any additional transaction fees. Here's a breakdown:
Hardware Costs
POS hardware is necessary for processing transactions, printing receipts, scanning barcodes, etc. Typical hardware components include:
-
POS Terminal (Tablet or Desktop): $100 - $1,000 (depending on brand and features).
-
Receipt Printer: $100 - $300.
-
Barcode Scanner: $50 - $200.
-
Cash Drawer: $50 - $200.
-
Card Reader (Payment Terminal): $50 - $300.
-
Customer Display (optional): $100 - $200.
Some systems (e.g., Square) offer free or discounted hardware with the purchase of a subscription plan, or offer a POS software-only solution that works on your existing hardware (e.g., tablets or PCs).
Software Subscription Fees
The software subscription is typically billed monthly or annually and depends on the features and scale of your business.
-
Square POS: Free basic plan; Premium plans can range from $12 - $40/month.
-
Clover POS: Plans start at $9.95/month, with higher-tier plans up to $69.95/month depending on features.
-
Lightspeed POS: Plans start at $69/month (basic retail plan), with additional costs for higher-tier plans with advanced features.
-
Shopify POS: Free with Shopify’s Basic plan ($39/month), but can go up to $399/month for the advanced plan (includes more advanced features for larger businesses).
Some systems offer a free or low-cost base plan, but for more advanced features (like reporting, payroll, or advanced inventory), expect higher monthly costs.
Transaction Fees
Most POS systems have transaction fees based on the payment method. These are usually charged by the payment processor:
-
Square: 2.6% + 10¢ per transaction (swiped, dipped, or tapped).
-
Clover: 2.6% + 10¢ (for swipe, dip, or tap); higher for keyed-in transactions.
-
Shopify POS: 2.9% + 30¢ per transaction (Shopify Payments); additional fees for other gateways.
-
Lightspeed POS: Transaction fees depend on the payment processor and plan you choose.
Additional Costs
-
E-commerce Fees: If you are using an integrated e-commerce solution, such as Square Online, Shopify, or Lightspeed, expect to pay additional fees based on your sales volume or plan tier.
-
Payment Gateway Fees: If you decide to use a third-party payment gateway (other than the one integrated with your POS), you may incur additional setup and transaction fees.
-
Integration Fees: If you need integrations with other systems like accounting software (QuickBooks, Xero) or advanced reporting tools, there may be additional charges.
Budgeting Example for a New Store
Let’s assume you’re opening a retail business with an average-sized store, including both in-store and online sales.
Initial Setup Costs:
-
POS Hardware: $600 (basic setup, including terminal, receipt printer, barcode scanner, cash drawer).
-
POS Software (first month): $40 (for a system like Square or Lightspeed).
-
Payment Processing Fees: 2.6% + 10¢ per transaction.
-
Online Store Setup: $0 - $29/month (with a basic Square or Shopify plan).
-
E-commerce & Inventory Integration: Included in most POS plans (Shopify’s basic plan, Square Online).
Ongoing Monthly Costs:
-
POS Software Subscription: $30 - $100 per month (depending on system and features).
-
Payment Processing Fees: Variable depending on sales volume (e.g., $2,000/month in sales would cost about $52/month in payment processing fees with Square).
-
E-commerce Fees: $0 - $29/month (if using Square or Shopify Online Store).
Employee Costs (Payroll):
-
Square Payroll: $29/month + $5/employee.
-
For a small team of 3 employees, you might expect around $44/month for payroll software, plus payroll taxes and wages.
Total Estimated Costs (First Month):
-
Hardware: $600
-
Software Subscription: $30 - $100
-
Transaction Fees: Based on volume (estimate $50 - $100 for $2,000 in sales)
-
Payroll Software: $44 (for 3 employees)
Total First Month Cost: ~$800 - $900 (without factoring in wages).
Conclusion
For a new store, we recommend Square POS for ease of use, low upfront costs, and integration with sales, inventory, payroll, and online sales. Lightspeed and Shopify are great options if you anticipate higher sales volume, need advanced reporting, or require deeper e-commerce integration.
Be sure to account for hardware, software fees, and transaction costs when budgeting for your POS system. Additionally, consider monthly operational expenses like payroll, taxes, and shipping for online orders.
Ultimately, the best solution depends on your specific business needs, but these systems offer scalable, flexible options to help you get started.