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POS Systems: Cloud-Based vs. Traditional

Whether you are expanding your online retail shop into a brick and mortar location, or even starting to sell your homemade goods at a farmers market, one thing is for sure: You’re going to need a point of sale system to get the job done (here's a guide to help you choose the best point of sale system for your small business)!

If you’re debating between saving some money up front and going with a traditional POS system or making the investment in a cloud-based POS system, here are a few important data points to keep in mind on the difference between the two.

 

Traditional Systems are Being Phased Out

There’s just no way around it: Cloud-based technology is the future of POS systems. Yes, you can certainly buy a traditional legacy POS system, and you probably won’t have any trouble making it work for at least the next few years. But as fewer companies manufacture them, and fewer people are able to repair and update them, eventually you’re going to have to opt for cloud-based anyway. For most people, it makes sense to just make the decision right out of the gate and skip having to hassle with switching everything over later.

 

Types of Point of Sale Systems

Many traditional point of sale systems were designed as an all-in-one solution for all types of businesses, but that doesn’t mean you should use them. A retail business will have different requirements than a coffee shop and each will have a few key differences to consider.  Specialized POS systems have been developed to cater to specific needs of your business.  In retail, retail point of purchase (POP) systems are best suited for retail environments. They can have retail shop features such as color, size, matrixing, inventory tracking, gift registry, customer database, purchase orders, layaway, employee commissions, and layway. The retail POS system may also have a digital scale or barcode scanner for weighting or scanning items respectively.

 

Cloud-Based is the Best Solution for Businesses Owners Who are on the Go

Traditional POS systems are designed to function as stationary systems, sitting on a counter at a retail shop and never moved unless the business is relocated. You certainly can’t haul a massive machine around to mobile events, or on vacation with you. On the other hand, a cloud-based POS system that runs off of a tablet is exactly what will work for you. You’ll also be able to access it 24/7, anywhere in the world.

 

Traditional POS Installation is Cheap, But Updates are Costly

Compared to the investment necessary to buy a handful of iPads, it can be tempting to go for a legacy system because the upfront costs are less. However, consider the costs that you’ll incur down the road when it inevitably becomes time to update. Traditional systems require a specialist, which means you need to make an appointment and pay someone to update your POS system for you. (Keep in mind that while that update is happening, you’re not able to sell anything.) Cloud-based systems, on the other hand, update with the tap of screen, just like the apps on your phone. You can run the update in the middle of the night with no harm done to your business in the process.

 

Cloud-Based Systems Make Running Referral Programs a Breeze

Rewards and referral programs are popular among business owners for good reason: They work (here is a list of the best). Then why doesn’t every single business offer them? Because they can be time-consuming to track, manage and administer. That’s true if you’re running a rewards program manually, but you should consider the benefits of an integrated loyalty program, which is hooked up to your POS system. This way, you get to reap all the benefits of a rewards program without any of the hassles of running it yourself.

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Vania Silva

Vania Silva is a freelance writer offering her experience in the retail word. Silva can be reached at community@meetupserve.com