Your New POS System Does Not Have to Be So Expensive

If you are in the market for a retail POS system, then you may have noticed how expensive they can get. Some systems still rely on being installed locally and can have upfront costs that could put a company out of business. But this does not mean that if you do not have thousands of dollars at your disposal, you are doomed to using a cheap point of sale that will not be up to par.

Does a new POS system have to be so expensive? A new POS system does not have to be expensive. Purchasing legacy software that is locally installed on a server can be very expensive, whereas modern cloud-based software incurs monthly fees that include more ongoing benefits and reduce upfront costs.

This article explores the costs and disadvantages of legacy software versus a cloud POS system which usually presents lower upfront costs and provides more advantages. We will also define all of these terms so it will be easier for you to understand and shop around for a new system. Let’s dive in with a couple reasons why legacy software is so expensive and outdated.

6 Reasons Why Legacy POS Software is Expensive & Outdated

What is Legacy POS Software? Legacy POS software is a point of sale system that is installed on a local server, therefore incurring higher upfront software and hardware costs. This type of software was common in the early 2000’s but is now outdated as it  usually does not include regular updates, support, or the ability to connect to modern systems such as eCommerce. Legacy software also presents a number of risks which we will explore below.

1. Exorbitant Upfront Costs

Legacy software incurs a number of high upfront costs due to most business models being based on purchasing the software for a lump sum, and then installing it on a costly local server.

You also need to consider setup and installation fees, as well as the cost of necessary compatible hardware (work station, scanner, receipt printer, etc) which can also get quite expensive.

To get your hands on the very best of these systems, you will probably have to pay thousands of dollars, and this usually incurs a large risk as the system you are buying may not even meet your POS needs.

2. Paid Updates & Maintenance

A traditional or legacy POS system has to be updated on your business premises since it is locally installed. Sometimes you can do this yourself, but oftentimes, you have to hire an expert to get the job done.

Obviously, that is also bound to be a significant expense on your part, especially considering that these updates have to be done on a regular basis.

Sometimes, the system might need to be re-installed, and that can be just as expensive as getting a new system installed. And, unless you are a developer and know how servers work, if your server crashes in the middle of a transaction, you may also lose out on sales.

3. Paid Support

Again, whenever your legacy POS system breaks down, you have to call in an expert to have a look at it. Besides the fact that this might not be the most time-efficient way to get support for your POS system, it also costs a lot of money.

For complex systems or systems with too many usability issues, the cost of support services can become pretty high. If on-premise support is required, this may take hours or days to take place, and therefore slow your business down.

4. Expensive Hardware

With a traditional POS system, you have to buy hardware such as on-site servers since the system is locally installed.

These additional hardware resources are often quite an investment as well, especially when you consider that you might have to hire an IT expert to ensure that the system runs smoothly by fixing any minor issues that might pop up from time to time.

In some cases, you might need to use proprietary hardware in order to enjoy the full benefits these systems have to offer. As you can imagine, special hardware is never cheap, and the costs can be staggering when you have to get the system installed in many business locations. 

5. Higher Data Loss Risks

Legacy software presents a number of high data loss risks. Since your data is on a local server, installed in your store, you run the risk of losing all of your data if there is a natural catastrophe like a fire or a flood.

Also, with the speed at which technology is changing, new security risks are popping up every day. If your legacy software is not up to date, it will also present a number of security risks.

6. Higher Running Costs

With greater hardware resources necessary to run a traditional POS system comes higher running costs. Servers can be real power hogs, and these, in addition to other on-site hardware necessary to keep these POS systems running, can increase your power bills significantly.

If your legacy software cannot connect to other, newer systems, you may also have higher operational costs. For example, if you cannot automate data flow from your POS to your accounting software or eCommerce site, you will have to work overtime to transfer sales information to these systems in order to keep your store information up to date.

After reading these paragraphs, you may feel like there is no hope for finding a less expensive retail point of sale system to run your store smoothly.

The good news is that cloud-based, software as a service (SAAS) business models have completely changed how businesses purchase point of sale systems within the past few years. Let’s dive into what this is and how it can be beneficial to your business.

10 Advantages of Cloud SAAS POS Systems

What is a cloud-based SAAS POS system? A cloud-based SAAS POS system is point of sale software that is offered for a recurring fee (for example monthly or yearly) and that is mobile thanks to data being stored in the cloud. SAAS business models usually include a number of key services from ongoing updates to support and security.

1. The Monthly Fees Cover Almost Everything

When you decide to use a cloud-based SAAS system, you do not have to purchase software for a lump sum. All you have to do is pay a monthly or yearly subscription fee for the features and the services the system provides.

That can be a fraction of the cost required to acquire a traditional POS system. The monthly and yearly fee is usually more affordable than a large upfront sum.

2. Support Is Included

Usually, when using SAAS POS systems, you will not have to pay extra for support services. SAAS companies usually have a support team in place that can offer all the support you need on an ongoing basis, and at no additional cost. They can afford to do this because they can support your POS system remotely, which makes it easier to offer this support at no extra cost to the customer. 

3. Updates Are Included

As we have seen, a traditional legacy POS system requires that you pay for updates on a regular basis. Whenever a new version is out, or new features have been added, you have to re-install or update the system. However, with a cloud-based SAAS POS system, the updates are regularly done remotely on the entire system, and you usually do not have to pay anything more than your periodical subscription fee to enjoy these benefits. Additionally, you can always count on having an up-to-date system, and without having to make any effort to have a modern system developed for you.

4. Lower Hardware Costs

As we have seen, a legacy POS system requires that you purchase special hardware such as servers. But with a cloud-based system, all you need are the basics such as computers, scanners, printers, and cash drawers.

These systems can even run effectively on modern technological devices such as tablets. 

5. Better Security

As we explored in the previous section, legacy software presents a number of risks. However, thanks to its cloud structure, cloud POS systems are more secure.

If your computer stops working, or your hard drive crashes, or your server frys, you will never lose your data with Alice POS because everything is stored in the cloud on protected, remote servers.

You will not have to make backups or worry about losing important information again.

6. More Integrations for Lower Costs

Modern POS systems can offer integration with other parts of your business in a way traditional systems never could. For instance, with Alice POS, you can connect the following services:

• eCommerce
• Marketplaces
• Accounting
• Warehouse Management
• ERP
• CRM
• Marketing

This means less labour would be necessary to keep track of inventory and other aspects of your business.

You can even use the system to handle advanced reporting and promotions. This should reduce the labour and the costs required to run these operations manually, which will be your only option if you decide to use a traditional Point of Sale system.

7. Reduced Hardware Operation Costs

Since you need less hardware to use a cloud-based POS system such as Alice POS, you should spend less money on hardware maintenance, and the fact that you should not need proprietary hardware or special equipment to run this system means that you will not have to spend more on power and other things necessary to keep this hardware running properly.

8. The SAAS Provider Bears Most Technological POS Costs 

If you decide to use an older POS system, you will have to put security measures in place to ensure that your data is safe and secure. But with a modern POS system, that responsibility falls in the hands of the company providing the software you are using, which lowers your costs and also allows you to focus on aspects of your business that really matter to you. 

As time goes by, technology keeps moving forward. This is one of the biggest cost burdens older POS system users have since there will come a time when a system overhaul has to be done in order to take advantage of new POS technologies and features.

Users of new modern systems can avoid this problem entirely thanks to up to date software.

9. More Features for Less

Most legacy POS companies do not focus on building a relationship with their customers, at least not as much as modern SAAS POS systems. With legacy systems, the software vendor basically considers their business with the client over and done once the system is paid for and installed, until they create another version to sell to them afterward. 

But with SAAS systems, the software provider has to have an ongoing relationship with the client since they get paid on a monthly basis under their subscription-based model.

For this reason, clients can easily find another company if the services they are getting are not up to par, which means players in this sector have to keep innovating to ensure that clients remain loyal to them. This results in regular upgrades to the systems at no extra cost to the client. 

10. New Revenue Stream Opportunities

Having an up-to-date POS system can allow you to benefit from new revenue stream opportunities with the following options:

• Sell used products
• Rental
• Consignment
• Repair
• Buy-back
• Trade-In

You also have cross-selling opportunities, memberships, the ability to create and track promotions and more.

With Alice POS, you will get a solid, highly advanced, modern POS system at an affordable price. You can go all out with this great piece of software that is supported by a dedicated team, and regularly updated. You can even manage multiple stores with Alice POS.

Related Questions

What happens with a SAAS POS system when there is no internet?

A SAAS cloud-based POS system relies on the internet to keep working. If there is a power outage or if the internet is no longer available, you can pair your system to a 3G internet dongle or router, or connect your POS to your cell phone’s internet connection to continue operations.

What is the difference between legacy POS and modern SAAS systems?

Traditional or legacy POS systems are locally installed in a business location, requiring specific hardware to run, such as a local server. They may not include backups, security updates, or support. But SAAS systems, like Alice POS, stock data in the cloud, are mobile and usually include key services for a subscription or recurring fee.