Using Retail Purchasing Resources To Increase Profit
Small businesses often overlook the importance of retail purchasing resources when attempting to grow their business. Believe it or not, the retail equipment you purchase heavily influences the type of customer that appears at a store. Businesses looking to stay at the cutting edge need to invest in technologically advanced retail purchasing resources while still staying within a certain budget. In the modern era, consumers not only look for convenience when shopping, they demand it. Failure to provide what is seen as a prerequisite will drive customers into the arms of a rival.
The Need For Convenience
There are numerous types of convenience expected of retailers such as ample parking space and clearly marked out aisles but nothing irritates a consumer more than an inefficient checkout system. Once a customer enters a retailer, they should be able to easily find the items they need, pay and leave. There are four key issues that will speed up a customer’s transaction, causing them to leave happy and willing to return:
- Point Of Sale (POS) Systems
- Credit Card Machines
- Credit Card Processing
- ATM Machines
It is not easy for an up and coming small business to afford top of the range equipment so it is necessary to shop around to find value for money. However, the above retailing purchasing resources are a worthy investment as it will help keep the customers a business attracts.
Most businesses are moving away from the traditional POS system, opting instead for more complex software from well known computer companies such as Microsoft. These are a realistic option for most small businesses because they are affordable and it is easy to train employees to use such software as they are already familiar with it. While old POS systems could basically only tot up the cost of goods, modern systems offer an impressive array of options.
Certain POS systems have the ability to offer gift cards, retain customer information, track work and sales orders and process debit and credit card details all in one. Such POS systems may cost several hundred dollars but this is worth it to speed up the growth of a new business. There is also alternative free software that does not have all the aforementioned whistles and bells but it does provide the basics such as the recording of invoicing, returns and payments. The bottom line however is to have a POS system that makes the customer’s purchasing experience as convenient as possible.
Credit Card Machines
Small businesses that do not have credit card machines are asking to be left behind. There is nothing more convenient for a customer than taking out their little plastic card and entering their PIN number. This prevents them from having to carry large amounts of cash with them and risk losing it or being robbed. Also, financial studies have shown that small businesses that invest in a credit card machine enjoy an increase in revenue of more than 70% when compared to companies without it.
Credit Card Processing
Purchasing a credit card machine is not just as simple as combining it with a POS system however. There is also the issue of credit card processing and merchant’s fees. Yet these merchant companies can be a life saver for small businesses with a lack of cash reserves. With proper credit card processing, a business can have funds transferred to its coffers within a week. There are a number of outlets for credit card processing including banks, independent sales organizations and financial service providers such as American Express. Businesses that apply for a merchant account should be prepared to undergo a background check.
The biggest expense will of course be the credit card terminal itself which may cost between $150 and $1,000 depending on whether it is a basic or wireless terminal. Some merchants may also charge application fees. After this expense, credit card processing will cost a business a small percentage of each transaction which goes directly to the merchant. This can range between 1.5-2% and there may also be a set fee per transaction. Be sure to check out each merchant’s fees because some of these companies have literally dozens of hidden charges.
Not all customers own credit cards and some may be caught short of cash. This is a common way of losing custom which can be alleviated by the purchase or lease of an ATM machine. This piece of equipment can cost upwards of $6,000 but can also be leased for less than $100 a month. This is a smart investment which may provide two forms of income. First, people who need cash will hear about the ATM machine in the store and enter to withdraw money. Then there is the possibility that they will like what they see in the shop and become a new customer. Secondly, an ATM machine is an additional form of revenue. The money placed in the machine can either be personal funds or borrowed from a financial institution. Each time a customer uses the ATM machine, the owner/leaser earns a small piece of the transaction fee charged by the bank.
These are just some of the basic retail purchasing resources that must be implemented by small businesses looking to make it big. Remember, as far as the customer is concerned, convenience is king.