How Much Does a POS System Cost?

What is a POS system?

A POS system is a hub for your business where customers can make payments for products and services at your retail establishment. Every time customers buy something, they complete a transaction at the point of sale. However, POS software is more than simple credit card processing. Instead, it has many features to help you manage your entire business, including e-commerce integration and contactless payment options.

What factors influence the cost of a POS system?

How much is a POS system? Unfortunately, there’s no clear answer. When purchasing a POS system, you may have to pay for hardware, software, and other fees for payment processing and additional features.

• Software: The software is the component of your POS system that isn't visible to customers, allowing you to find items to ring up without scanning a barcode. Additionally, the software might come with reporting tools, inventory management tools, and options to route funds to your bank. If you’re running an e-commerce store, you only need software to help customers complete transactions because there’s no need for physical hardware. Point-of-sale software costs vary depending on your needs and integrations with online or offline systems.
• Hardware: The physical components of your POS system are called the hardware, which includes terminals, devices, card readers, barcode scanners, cash drawers, receipt printers, displays, and routers. The hardware allows you to accept payments in a physical location. Ultimately, it consists of all of the parts of the register where you collect your payments.
• Fees: POS systems process payments, so you’ll also be responsible for paying fees associated with processing card payments. Every time you sell an item, your POS system processes the transaction, which may include using cash, online payments, chip cards, and contactless payments. With the exception of cash, there are fees for every transaction, which vary depending on the provider.
• Available features: Depending on your needs, you may also choose various add-on features to help you manage your business. Additional features may include inventory management tools, reports, staff management software, receipts, tipping options, and customer relationship management CRM that tells you what specific customers purchased.

Fluctuating costs of POS Systems

While most of the costs associated with POS systems come at a fixed price, you'll also experience fluctuating costs, which may include:

• Training: Every time someone is hired at your business, they’ll need to be trained on the POS system. Depending on your provider, you may be able to pay them to expertly train new hires. Otherwise, you may have to ask existing employees to take the time to teach these new individuals. Either way, training someone on the POS system costs time and money.
• Transaction fees: Transaction fees vary depending on the POS system provider. These types of fees can also occur monthly or per transaction. For example, the Lightspeed POS system has a processing fee of 2.6% +$0.10 for every card transaction. Ultimately, the more customers you have, the more you’ll pay for these fees.
• Number of terminals: The more terminals you have, the more you’ll also pay. You can choose to have one terminal where customers can go to complete their transactions, or you can give every employee on the floor their own terminal. You can add terminals to your POS system plan later, so you may not want to start with more than one terminal, depending on your needs.
• Users: You may also only be permitted to have a set number of users for your POS system. Paying for more users will cost more money on a monthly basis.

Installation cost of POS Systems

If you’re only using POS software, you may not need installation unless you have thousands of products for sale online and need help adding your inventory. Additionally, you may still require training, so factor that cost into the system's total price. However, if you’re using hardware, you may have to pay for the installation to help you get up and running. Unfortunately, not all POS system providers will offer installation. Depending on the provider, installation could take place in person, allowing an individual to come to install all the equipment for you. You may also be able to get help over the phone and install it yourself.

You can pay more to have your POS system professionally installed and hands-on training to make the transition easier for you and your staff. However, how much you’ll pay for installation will depend on the provider and the type of support they offer. For example, you can expect to pay less for over-the-phone support and more for in-person installation and training. Additionally, some providers will offer a fixed one-time installation fee, while others may have flat and hourly rates.

Free POS systems

Small businesses can use free POS systems to help them save money, but they work differently than paid options. Free POS software only charges the business per transaction. Many providers have free plans, which means no monthly fees, but this is only for the software. Any hardware you need will have to be purchased. Meanwhile, using the software is free as long as you pay for every transaction.

Free POS system software can be a great option for small businesses trying to save money. However, if they manage a large number of sales monthly, transaction fees can accumulate and become more expensive than purchasing comprehensive POS software.

What to look for in a POS system

There's no one size fits all solution for businesses looking for a POS system. Ultimately, you’ll have to consider the size of your business, its needs, and sales frequency. Here are a few things to look for in a POS system for your business:

• Inventory management: Retail businesses must understand how sales impact inventory to replenish items once they sell out. POS systems should be able to help you track inventory based on sales to help you make better purchasing decisions.
• Integrations: If your business has an online store, you’ll need your POS system to integrate seamlessly to track inventory and sales. For example, the Hike POS System allows you to integrate with your e-commerce store to make sales simple for customers and allow you to track inventory online and offline.
• Customer management: A good POS system should help you manage customer relationships by telling you what a particular customer last purchased and when. Depending on your integrations, your POS can integrate with your online marketing software to help you sell more products online and offline.
• Staff management: POS systems should allow staff to do everything they need to complete a transaction efficiently and help serve as many customers as possible.
• Sales reports: Sales reports can help you understand the financial health of your business. If you’re running an online and in-person store, you’ll need a POS system that can help you track sales online and offline.

Wrapping Up: The Cost of a POS System

The average cost of 1 POS system for a small business ranges from $80 to $150 per month. However, POS system costs vary depending on the provider and your needs. Before purchasing software or hardware, make sure you understand the costs associated with processing payments using a POS system and how those costs can affect your business. While a POS system is necessary for your success, you can find one that suits your business needs without paying for features you don’t require.

Once your POS system is up and running, you can integrate your customer data with Mailchimp’s marketing automation software to build marketing campaigns and bring customers who have already made a purchase back to your website or retail store.