4 Ways Resellers Can Compete Against Free POS Systems

October 16, 2018

As a value-added reseller (VAR) there are multiple selling points that give you the upper hand against free point of sale (POS) systems. You have value to offer as a VAR! Making sales will depend on your ability to sell that value to small and medium-sized merchants shopping for a new POS system. With a little research about the downfalls of free POS systems, you can:

• Explain hidden fees of “free” POS systems
• Describe the obligations with free systems
• Educate merchants on the limited usability of free POS systems
• Convey the value your company offers through service, payment plans, and more

Is free, really free?

When weighing the costs of a POS system provided by a VAR versus a free POS system, make sure your customers and prospects understand the hidden costs that come along with “free POS,” which may include:

• Fees for service, support, software upgrades, and account maintenance
• Limited or trial versions of software that require a fee to upgrade to a full version
• A percentage of revenue from card transactions or an additional fee charged on top of each transaction processed through an outside card processor
• Contracts obligating payment of fees even if the merchant goes out of business

After adding up these potential hidden fees, you’ll probably be able to demonstrate that it’s more cost effective to go with a VAR where all costs are transparent and predictable and there’s no guessing game for the merchant.

What are merchants actually signing up for when using free POS systems?

In the “free” POS system contract merchants are required to meet obligations. These obligations could include:

• Using the system for a specific number of years, even if the merchant doesn’t like the system
• Using the hardware provided with the POS system, which may not be equipped to handle future regulations

As a VAR, you can explain that free POS is often best considered a short-term fix, rather than a long-term solution. Taking into account the costs, obligations, and contract, your customers can be confident that their agreement with your VAR was the best move for their businesses.

Does limited functionality sound cost effective?

In addition to subpar value and undesirable contract terms, free POS systems often have only minimal features.  Businesses often need more functionality than free POS systems can provide if they want to stay ahead of the competition. Some free POS systems limit use on multiple registers, allow no more than five employee logins, and lack capability to process sales that exceed $20k per month. Merchants may need costly integrations if they want to add, for example, inventory management, loyalty programs, or customer relationship management (CRM).

Close the deal by focusing on the “Value” in “Value-Added Reseller”

As a VAR you can offer value to your customers that a free POS system vendor cannot provide, including:

• 24/7 service and support
• POS add-ons and managed services
• Training and installation services
• Expanded hardware options

The in-person service you provide will also enable you to listen to your customer’s needs and customize a solution that addresses their challenges and goals. With a POS solution tailored specifically to their business, your customer can confidently avoid the pitfalls of free POS systems while watching their business grow.

After covering the advantages and disadvantages between the systems, the merchant will leave the sales pitch knowing that a “free” POS system is often not free after factoring in hidden fees, expensive contractual obligations, and limited functionality. By offering the right software with the features merchants need, at the price point they can afford, you can effectively compete with free POS and help your prospects succeed. Contact TallySoft today to learn more about our innovative retail POS software and industry-proven reseller program.