We just converted our liquor store from using an old-fashioned cash register and paper records to using an iPad-based Point of Sale system. I learned so much in the process that I knew you’d want to me to share.
Our Old System: lots of paper
When my mom bought her liquor store in 1992, it came with a traditional cash register, an adding machine, and no detailed sales records of any kind. Being a good geeky person, she started researching what computerization would make sense. PC-based Point of Sale (POS) systems cost up to $5,000 back then (and that was a lot of money in 1992). They were clumsy and expensive and looked really hard to work with (thus truly earning the name of POS). So Mom designed a paper system. Up to 1200 SKUs (or different items), all on paper. Every time one of us made a sale, we recorded each item on a printed-out spreadsheet we kept in a binder on the counter. We figured prices with another spreadsheet. Want to know what sold well for Thanksgiving last year? Well, dig into the pile of paper and find November last year, then scan through the entire list to find the big sellers. It was a pain, but it was so much better than no records at all. It worked well enough.
By 2006, when Mom retired and we started, POS looked a little more attractive, a bit better polished, but still expensive. Liquor store-specific systems ran from $5,000 to $10,000. And in a small town, I knew I’d be on my own for tech support. I took a fresh look at our spreadsheets, and streamlined them. I got it down to one master spreadsheet, easier to keep up-to-date. It was an improvement, but we still needed a real inventory system. One that wasn’t just on paper.
Square Got Close
When we finally converted to Square for our credit card processing, I was tempted by all the Point of Sale features that they built into their app. It could act as our cash register! We could even enter all our items, but Square still couldn’t track inventory. I really, really wanted inventory tracking. So I started searching. Is there an app for that? Turns out, yes, there are a few solid iPad-based Point of Sale systems that include inventory tracking features. I looked at Vend, Revel, Intuit, NCR’s Silver and ShopKeep.
Update: As of May 2014, Square is starting to add more inventory features.
We Picked ShopKeep
After initial research, I decided on ShopKeep Point of Sale. What tipped the scales for me was that ShopKeep was created by a frustrated wine shop owner who decided to build what he himself needed. So surely it would have features that a liquor store would need, right? (It’s pretty close!) I was also influenced by their customer service.
I started by setting up a test store from my iPad and trying out some test items. As I played with it, I started a list of questions. The more I played with entering items, making pretend sales, and watching how it handled inventory, the more I understood the basics and the more I could ask more detailed questions. I put in a phone call to ShopKeep to ask those questions. My customer service rep Kevin was very good. He answered all my questions and took all my suggestions for improvement.
Think Through How It Will Work
I spent a lot of time thinking through how the system would actually work in our store. For example, all these iPad POS systems use little icons or buttons on screen to represent each item or SKU. In our case, that would mean a product like Jack Daniels would need 5 buttons for all the different sizes, and it would be all too easy for a clerk to tap the 750ml icon when selling a 1 liter bottle (since they look close to the same size), or even the 375ml icon when the sale was actually a 1.75 liter. (375 and 175 sound similar in your head, but 375ml is about a pint, and 1.75l is about a half-gallon.) (Those of you raised with metric system, stop laughing!) That kind of mistake would be very costly. So we decided to go with a handheld scanner to read the barcodes on bottles. That way, there is no need to pick the right button. The scanner is much more accurate than a person. And quicker.
We already had an iPad we used for our Square credit card processing. So we didn’t have to buy a new one. We did buy a snazzy new red iPad stand, a fancy receipt printer and a compatible cash drawer. Our equipment costs added up to about $1100. But a smaller business could get away with around half that by cutting out the bar code scanner, or the receipt printer and cash drawer. Technically, all you really need is the iPad.
Changeover Takes Time
To get all of our items (over 1,000) into the ShopKeep system took time. Lots of time. We had to take our old spreadsheet system and copy the info into the format that ShopKeep wanted. Actually, we ended up retyping a lot of data because it was actually quicker than making all the changes in formatting. (What a pain!) We also scanned the bar code off each bottle. And that took a lot because we didn’t have the bar code scanner yet, so we used our phones. That was a pain, too. I recommend you get the scanner you’re going to use and use that for your data entry.
Update: As of May 2014, ShopKeep has made importing much easier. You can import in batches, and you can update items in bulk.
Then we did a small amount of testing and went straight to using the system full time. I will admit it would have been smarter to do more testing and work out bugs without using customers as beta testers. But it was such a step forward we just couldn’t make ourselves wait any longer!
Credit Card Processing
Square and ShopKeep are not integrated. To take a payment with Square, we had to leave the ShopKeep app, and open the Square Register app to accept the payment. This isn’t good for service. So we decided to try out the credit card processing recommended by ShopKeep, a service called Payment Revolution. Having had a very unpleasant experience with traditional merchant processing, I was very, very cautious. But Payment Revolution allows month-to-month service without a long term contract. This was enough reason for me to try it out. I knew I could return to Square at any time. The equipment cost was less than $200, which I could pay up front. No nasty unending equipment lease.
So far, the service integrates flawlessly with ShopKeep and has not hit me with any hidden monthly fees or unexpected expenses. It isn’t as up-front clear about total costs as Square was, because it is a traditional interchange-based processor. That does mean ugly statements and lots of variation between transactions. (Rewards cards get charged at higher rates, and so on. When I look at my monthly statement, I see 7 different rates just for the different types of MasterCard.) My sales rep with Payment Revolution could only give me an approximation of 2.4% effective rate based on our sales volume.
I had to wait for my first full-month statement to figure out what the effective rate turned out to be: 2.32%. (Total costs/total processed=effective rate.) It varies every month, based on how much volume, what type of cards customers use, etc. Then I could compare that back to Square. We were using Square’s monthly pricing, which brought our effective rate down below 2%. If only Square was an integrated payment method in ShopKeep, that would be much better. But Square and ShopKeep see themselves, if not as direct competitors, at least as not willing to cooperate. So we’re using Payment Revolution for now. But I’ll be keeping an eye on the effective rates and the cost difference compared to Square.
I’d also like to see Dwolla as an integrated payment method, as was announced with much fanfare earlier. Unfortunately, that never happened and doesn’t look at all likely.
The people working the front lines love the new system. No more marking down every item sold. No need to train any new person in the arcane organization of liquor items by category. (“Is honey whiskey a straight, or a specialty?”) No need to know the category system to look up a price. No need to write down your clock-in and clock-out times. All of that is handled by ShopKeep.
Customers have commented repeatedly on the high-tech look and feel of the system. We’re also giving customers faster checkouts and fewer out of stock items with this system.
Inventory control is the single biggest benefit for us. The reorder reports point out items that are out of stock that might have been missed. The same reports each week help us catch that we have more of an item in back, when we just thought we were out of stock. Now that we’re about a month and a half into using it, the system has enough previous sales in it to provide meaningful data when planning what to order. (I can’t wait until we have a full year in there.)
If you like the look of ShopKeep, consider signing up for your free trial using this link: http://www.shopkeep.com/signup?s=allenretailliquors If you do and you ultimately become a paying ShopKeep customer, I get a credit for one register for one month at no fee. That’s a $49 value to me. You can also sign up without the referral link at shopkeep.com. Totally up to you.
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