ROI for a point of sale software



Here is a list of some advantages that a retailer would have using a point of sale software.

These figures I quote is based on industry figures, and I am assuming a shop with sales of about $500,000 EX GST/year with a 30% margin

Sell more

There is a lot more information available to the retailer which allows them to target short-term trends better and measure results faster. As you will get a full history of your customers, you will be able to track their purchases and so develop better long-term relationships. 

Generally, you can expect an improvement of about a 1 to 2%, so we are looking here at about $5,000 to $10,000 sales increase so about $2,250/year

Buy better

By giving more control and information to the retailer, they can buy better, take better advantage of special offers.

Also, the retailer is getting better information on what is selling and what is not selling so avoid buying the rubbish so generally about 1% better so $500,000 x 70% x 1% = $3,500


Better controls and better monitoring helps a lot.  The major causes of shrinkage are 

1) Customer theft - The five finger discount

Your stocktake reports will tell you better than manual the location and type of items that are disappearing. 

2) Damage - it happens goods get dropped in the shop, too much sunlight on an item ruins a book, etc. Much can happen between you get the item and the customer taking it.

Generally, there is little a POS system can do here to help. 

3) Supplier fraud - This happens all too often, for example, a typical example is that a supplier bills you for goods shipped, but for some reason, you did not get all these goods. Even large suppliers do this.

Point of sale systems is very good at helping here. With some people, just the saving here has paid for the system. 

4) Staff theft - This is a big problem in some shops in others it is nearly zero.

At least with a POS system, you can monitor much of it better. In one site recently we were able to by tracking the shifts, tell the owner the likely person that was taking money from the till.

I would expect overall at least a 1% improvement in shrinkage. A $500,000 business, at 70% margin saving 1% a year we are looking at $3,500

Bottom line:

Increased profit on improved sales of $2,250/year

Better buying and more accuracy in buying $3,500

A decrease in shrinkage of $3,500

Overall saving about $9,250 a year on $500,000 turnover.

And another thing

There are extras that I have not qualified such as 


I would expect on an average about an hour a day of time saved. So say 5 hours of work a week.

Reduced stocktake costs

Many of our clients used to hire professional stock-takers, well there is no reason too with a POS system as you can do it yourself 

VIP marketing

Most retailers today big and small do some VIP market and do this effectively you do need a computer

In addition to that

You have improved control in the business

A retailer with a point of sale system is much more in control, even if nothing else it makes most people feel much better.

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