How we switched to an iPad Point-of-Sale system

The new iPad POS set up in our store.

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 good geeky people, we 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). 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 we 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 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.

Our first step toward POS: Square for credit card processing.

Our first step toward POS: Square for credit card processing.

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.

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 the same 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.

Equipment

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.

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. I have 7 different rates just for MasterCard on my statement.) 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.

Benefits

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. Our 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.)

Referrals

If you’re considering ShopKeep, take a look at it at ShopKeep.com. If you like it, consider signing up for your free trial using this link instead: http://www.shopkeep.com/signup?s=allenretailliquors If you do, that gives me a referral. If 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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Comments

  1. says

    Paul sent in this comment by email:

    As the publisher of a magazine promoting a “small town” type area in Jackson, Miss. called Fondren, I am a subscriber to your email and get great advice to pass along to my partners (clients) who “advertise” with us (I hate the A word!)

    Here’s a story we did a couple of months back on a merchant here – the first – who switched to an iPad based POS: http://www.finditinfondren.com/2013/08/23/fondren-guitars-ipad-based-sales-system/

    Best,
    Paul Wolf
    Publisher and Founder

  2. says

    I love your move toward paperless. I also appreciate that you have a paper tape, for your more traditional customers.

    I would guess that it will result in a big time savings, when it comes to balancing the books.

  3. says

    Hi Becky – are you finding your experience with Payment Revolution to be positive? I just started working with Shopkeep for my new store and went with Payment Revolution over my bank, Bank of America. I figured I could try them since there’s no contract, but would love to know what you think now. Thanks!

    • says

      Sydney, so far, I’m satisfied. The integration works perfectly, and the rates have stayed reasonable. They have not hit me with any unexpected fees or any “surprise” nastiness.

  4. Nichola says

    I wanted to know the bundle cost of your cash register using the iPad. I am looking into starting my own business in Georgia, and I am trying to get all my costs lined up. I would need everything for the cash register.
    Thanks for any feedback you can give me.

  5. Kirk says

    Have been looking at these systems, not liking the $49/mo subscription fee. Would rather buy the software flat out.

    • says

      Kirk, there are still some systems that price on a flat fee rather than monthly. Some, like Square POS, have no monthly fee but have fewer features. So look around at the many systems currently available to find your right fit.

  6. Tracy Colameco says

    Hi Becky,

    Are you still satisfied with Shopkeep? I own a small wine store (opened last August) in MA and right now I just have a cash register. Inventory is very hard to manage and we do a full store count every month. A POS will make things much easier, especially if we can create customer lists and manage gift cards and frequent buyer cards on it as well. Do you do any of this? How do you justify the $49 a month fee vs. no fee on a traditional cash register? We are a small store, thats a pretty big fee.

    Thanks, Tracy

  7. Morgan says

    All that data entry sounds grueling. I thought you had everything in a spreadsheet already? Does Shopkeep not have an Import feature? And $1100 for a printer, scanner and cash drawer is way too much. Did you purchase the hardware from Shopkeep?

    • says

      Morgan, think of it like learning accounting software like QuickBooks: the hardest thing you’ll do is setup, and you have to do that first. Now that I’ve actually finished ours and helped another business with theirs, I can say the second time was much easier.

      For our setup though, all our data was in a spreadsheet, but not in a way that was right for importing to ShopKeep. Our descriptions were abbreviated in a way we understood, but might not make sense on a receipt. So all the descriptions had to be rewritten. ShopKeep needs lots of additional data columns we had to fill in. We had to double check all cost numbers to be sure we had the current wholesale costs. It took time.

      Since then, ShopKeep has improved their importing process, and you can do it in batches and even make batch corrections, which is very helpful.

      I felt the same way about the cost of the hardware, but it makes sense. This is not just a $50 desktop printer; it’s a specialty receipt printer that communicates with the software and the drawer. The drawer isn’t just a box, but also listens to the printer. We also got mounting hardware for the drawer and a tough metal iPad frame. The high ticket item was the barcode scanner. I did shop around and compare hardware costs. I found that ShopKeep was pretty competitive with other sources. And, remember, many stores don’t need as much hardware as we did.

      Is ShopKeep right for you? That’s something you’ll have to research for yourself. I do strongly encourage every small retail business to look into the many iPad-based alternatives to that clunky old cash register.

  8. AJ says

    Hi Becky,

    This is a great success story of how small retailers are utilizing technology to enhance the customer experience whilst also reaping the benefits (inventory management, coat savings, etc).

    One question I have on the interchange fees side of things – is there a way of avoiding the MasterCard (or other schemes) fees associated to Credit/Debit transactions whilst also keeping the system integrated?

    Thanks,
    AJ.

  9. Jay Russ says

    Great read. I’m planning on opening up a shop within a year and have started looking into registers, and game across this.

    I have a handful of questions, if you don’t mind me asking (sorry!)

    Are you still liking the system this far out?
    Have your rates with Payment Revolution still been acceptable?
    Do you have any kind of complaints in general about switching over or this particular system?

    Thanks!!

    • AJ says

      Thanks Becky – sorry I appreciate that May have come across in an illegal manner ((it truly wasn’t meant to sound like that))?!

      What I meant was; instead of the seven varieties of MC options you had to programme into the system – is there a way to have one or other alternatives to make the fees competitive?! Does that make sense :-)

      Thanks again, AJ.

      • says

        AJ, sorry I misunderstood. I have not had to program any rates into the system. We just swipe customer cards, and Payment Revolution deals with all the different rates and technicalities in the background. I never see all those rates until I look at my monthly statements. Then I can see that Payment Revolution has classified each card and transaction according to the interchange rates and rules. It’s really not a problem at all.

    • says

      Jay, I do still like the system. ShopKeep continues to improve their product. Payment Revolution rates have been pretty stable for me. We’re still using them.

      I think I listed all my complaints! If I was opening a shop, there is no question I would use a system like this. Which particular system would depend on the size of my shop and inventory needs.

  10. Amanda says

    Thanks for sharing this, Becky!

    Even though I work for a different iPad point of sale system called Change (www.change.io), I found this post incredibly helpful. We want to make our system the best it can be and I appreciate the time you took to outline your pain-points, your needs, and how you ultimately came to your decision. I hope to use some of this information to help our customers as well!

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