When selecting a point of sale (POS) system, many independent retailers focus on the initial monthly subscription fee. While the entry-level price is easy to find, it rarely tells the full story. To understand the actual impact on your profit and loss statement, you must consider the total cost of ownership. This figure includes the software rental alongside the ongoing cost of processing every transaction your business makes.
Understanding your total cost of ownership is vital, it’s worth doing the homework for this can save you thousands of dollars a year.
The Shopify POS model
Shopify is a well-known name in the digital space, and its POS software is often a starting point for those looking for simplicity. For a standard monthly plan in Australia, the base cost is approximately $56 if paid monthly. Over a full year, this totals $672 for the software alone.
However, the software fee is only part of the expense. The significant cost lies in transaction processing. For a typical gift shop or specialty retailer in Australia with an annual turnover of $750,000, transaction fees are substantial. At a rate of roughly 1.95% to 2%, a retailer would pay approximately $14,625 in processing fees annually. When combined with the software subscription, the total cost to use the platform reaches $15,297 per year.
The Tower Systems alternative
In contrast, specialty retail software like Tower Systems operates on a different financial structure. For the same business, the software rental costs $2,820 for twelve months when paid monthly.
Tower Systems does not charge a fee per transaction, a tax some might call it.
The primary difference is in how payments are handled. Tower Systems allows retailers to use various EFTPOS processing partners. On an average rate, processing $750,000 in sales would cost approximately $7,500. It is worth noting that many retailers are able to negotiate even lower rates, potentially reducing this figure by another 25%.
Based on these average figures, the total cost for the Tower Systems software and transaction processing is $10,320 per year.
Comparing the bottom line
When you compare these two real-world examples, the difference is clear. Choosing the specialty retail software saves the business $4,977 annually compared to the Shopify model.
This calculation only covers the direct financial costs. It does not account for the specific retail features built into Tower Systems that may not be available in a more generic POS platform. Furthermore, the value of accessible, human-led technical support is a vital consideration for small business owners who cannot afford downtime.
Making an informed decision
A saving of nearly $5,000 a year is a significant amount for any independent business. It represents capital that could be reinvested in inventory, marketing, or staffing.
Retail is personal. When you evaluate technology, take the time to look beyond the marketing headlines. Speak with the people behind the software and ensure you have all the facts before committing. Prices and processing rates do change, so it is important to verify current figures at the time of your decision.
By being thorough in your comparison and focusing on the total cost of ownership, you can protect your margins and ensure your technology serves your business effectively. You can learn more about these specialty retail tools at www.towersystems.com.au.
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The right POS system for any retail business depends on the specific needs of the retail business. Tower offers POS software made specifically for local small business retailers in a selection of retail channels. To see if we might help you…, request a free, no-obligation demo today.
Call 1300 662 957 in Australia or 0800 444 367 in New Zealand. Or, email sales@towersystems.com.au.
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