Point of Sale
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Every day, millions of Americans buy millions of products from retailers, and these products unsurprisingly come from millions of different businesses and warehouses, being shipped to millions of retailers across the United States who then sell them to consumers. With all these transactions taking place, it is no wonder that running a retail business requires a great deal of organization and diligence. It is no easy task to manage the entirety of the supply chain and sales process as a small business owner – especially when you are worried about so many of the other aspects that go into operating a successful and profitable company.

Fortunately, there are a number of point of sale (POS) solutions for small businesses that can greatly ease the burden of managing all these moving parts and streamline the overall process. These systems are designed to automate all these complex processes, collecting and storing valuable data at the same time. You can then yield actionable insights from this data. POS systems are, as a result, a critical component of the operation of any small to medium-sized business (SMBs). However, not every POS software is the same and many feature different functionality, integrations, and more. This can make choosing the right POS system for your business a real challenge, especially if you don’t know exactly what your business needs out of a POS system. In this article, we’ll go over what exactly a good POS system can do for your business. Afterward, we’ll discuss the best POS solutions currently on the market and give you an idea of the various options available to you.

What Does a POS System Do?

POS systems fulfill a number of basic and complex functions for businesses. As part of this, there are all different levels and price points for point of sale systems depending on the needs of your business. Obviously, the bigger and more complex your operation is, the more sophisticated and advanced a POS system you will need to operate successfully.

Here are a few things that POS systems can do for you:

Payment Processing

The biggest and most important function of a POS system is typically the payment processing component. Whenever a customer buys something from your business, you have to record it. And if they are making a contactless payment, such as using a credit card or debit card, you have to process the transaction so that you can receive the payment. POS systems handle the entire checkout process for you allowing your business to accept multiple payment methods and conduct business with just about any customer that walks through the door.

In fact, POS systems are the go-to systems for payment processing. They can record cash payments, process credit card payments (there will be a processing fee associated with each transaction), and manage the entire back-end of tracking and processing orders and purchases. Many POS systems can also manage and process online ordering and payments.

Then, at the end of the week, month, or whatever time period you set, POS systems can compile sales reports and allow you to keep track of your finances.

Inventory Management

POS systems also enable businesses to track inventory in real-time as it comes in the door and is purchased by customers. Not only is this critical for keeping track of what products you have in stock, but it is also important for maintaining and analyzing actionable data and insights from the sales you make. POS systems will enable you to monitor and keep track of which items are selling the fastest, which items you need more stock on, which items are making you the most money, and more! We live in a data-driven world, and POS systems are an important solution for small businesses looking to use data to improve their operations.

Employee Management

Employee management is another important component of POS systems. POS solutions can typically track when employees are working, who is scheduled for what shifts, and what employees are free to fill in. It makes the employee scheduling process a lot easier than if you were trying to do it all by hand on a sheet of paper.

Additionally, POS systems allow businesses to track employee performance metrics and grant permissions. You might incentivize your employees by offering them commissions on sales. A POS system is the number one way for tracking who made what sales and how much bonus they should receive. Additionally, POS systems allow you to grant certain employees certain permissions. For example, many businesses like to give the store manager the ability to override certain aspects of transactions, such as giving a customer a discount due to damage on an item or allowing them to use a coupon that expired a few days ago. You may not want to allow all your employees to make these decisions and instead reserve them for company management – a POS system will allow you to do exactly that.

Customer Relationship Management (CRM)

Many POS systems also serve as CRM systems. CRM tools allow you to manage your relationships with customers. This means identifying what customers bought which items, sending out emails, personalizing marketing and other forms of communication, and more. Customer management is often one of the hardest parts of operating a small business, but if it is done correctly, it can have a transformative impact on a business.

Certain POS systems can also manage coupons, discounts, loyalty programs, and gift cards, critical components of marketing and something that can be very important for retailers in particular.

What are the Best POS Systems on the Market?

There are numerous high-quality POS systems on the market that small businesses can take advantage of. Additionally, there are many different types of POS systems for different types of businesses. For example, there are specially designed restaurant POS systems (such as Toast, TouchBistro, or Revel Systems). In this article, we’ll be focusing on retail POS systems in particular. However, the general functionality as outlined above holds true for most POS systems depending on the specific features they offer.

Here are a few of the top offerings currently on the market that small to medium-sized retail stores can utilize:


Square is one of the best universal point of sale solutions available. It can be used for all kinds of businesses, ranging from retailers to restaurants to e-commerce.

Further, it is one of the premium options for small businesses just based on its pricing. It offers highly adaptable and affordable features that emphasize ease of use. Plus, they have a free POS option and mobile POS system solution.


The free POS system offered by Square is quite robust in its offerings, and you will be able to find a myriad of features that are typically only available as paid features in other POS systems. If you decide to upgrade to a Pro POS plan offered by Square, pricing starts at $60/month.


Square also offers relatively inexpensive hardware options, including card readers starting at $49, that are easy to use and can be operated via a mobile app. They also have more advanced hardware options for storefronts that come at very reasonable and affordable price points, including iPad POS solutions, allowing you to manage your entire business operation from a single tablet. One of their most popular pieces of hardware is the Square Register, which is designed to be one seamless POS system and eliminate the need for POS apps and other hardware in your storefront. They also have receipt printer options – something that is still important to many customers. The system can also be connected to a cash register or cash drawer, allowing you to accept and record cash payments.

Processing Fees

Square’s processing fees are a little more expensive than you will find with some other payment processors, which is something to consider depending on the volume of sales you do and the features you need. However, the difference is not too dramatic. Card processing fees are 2.6% plus 10 cents for each transaction.

POS Features Designed for Retail

Square offers what they call “Square for Retail”. This gives retailers access to management tools that allow them to create and manage barcodes, manage vendors, purchase inventory, and compile detailed sales reports. Square’s POS system can also be used on both iOS and Android systems as well as through Square’s own previously noted hardware.

Where the Square POS system tends to struggle is with large and complex inventories, businesses with multiple locations, and operations that call for highly sophisticated and powerful POS tools. Square is, at its core, designed for small businesses, which is something to keep in mind when you consider Square.

Shopify POS

Shopify is one of the leading e-commerce platforms available right now. They offer a user-friendly product targeted at businesses of all sizes. Additionally, while their core customers are e-commerce businesses selling online, they offer POS solutions both for their e-commerce focused platform users (in case they want to sell products they typically sell online at events or in a store) and for traditional brick-and-mortar retailers who also have an online store (or online sellers who also have a brick-and-mortar location). The biggest downside to Shopify POS is that you have to have an e-commerce subscription in order to access their POS system, so it’s not a viable option for businesses that don’t want to have an online storefront of any kind.


​Pricing for Shopify POS is expensive simply because you have to have an e-commerce subscription in order to use it. Monthly e-commerce fees on the platform typically range from $39 to $299+ a month, depending on the size of your operation and your business’s needs. However, if you want to have an online presence, it’s hard to beat Shopify for running an e-commerce operation in terms of functionality, features, and value, so if you are planning to have an online presence Shopify could be the best route for your business.

After paying the monthly fee for their e-commerce platform, Shopify customers have access to their basic POS app for free. However, you can upgrade to Shopify POS Pro for $89/month. If you are running a brick-and-mortar retail operation, upgrading will be almost essential, since the basic POS app is fairly limited in its functionality.


Shopify POS can be operated from a tablet (such as an iPad). For processing payments, Shopify offers a chip and tap card reader for $49. Shopify POS can also be operated from your mobile phone, making it a great option for businesses going to product fairs and other in-person events who want to be able to sell to potential customers while there.

Processing Fees

​The transaction fees associated with Shopify are fairly standard. They range from 2.4% to 2.7% using their built-in Shopify Payments solution.

POS Features Designed for Retail

It’s in the category of features and management tools where Shopify really shines. You can manage unlimited products, categories, collections, variants, and more through Shopify’s system, and their inventory management tools include what they call Stocky. Stocky is a smart inventory app that allows you to receive products with a barcode scanner, receive detailed stock reports and notifications when items are running low, perform inventory counts and checks, forecast demand, analyze product sales, and more. It can even give you suggestions on which items to put on sale.

Shopify also features one of the best customer relationship management (CRM) tools around. With Shopify, you can generate customer profiles that record contact information and track shopping habits, send out targeted promotions and marketing content, run targeted social media campaigns, and more. As the leading small business e-commerce platform, Shopify basically has it all when it comes to features. Plus, there are thousands of integrations that you can add to Shopify from third-party providers that allow you to expand the capabilities of your Shopify system.

Other POS Solutions

​Square and Shopify tend to dominate the POS software market when it comes to small businesses. While Square is more oriented towards brick-and-mortar retailers with a limited online presence, Shopify has a breadth and depth of features and tools for e-commerce and brick-and-mortar retailers that are essentially unmatched, but it is more expensive and requires an online presence.

Another POS solution on the market is Lightspeed. Lightspeed Retail is one of the best inventory management systems around, offering a wide range of detailed inventory and analytics tools that allow for a scaled-up and expansive operation. However, Lightspeed is also quite expensive and the tools it offers are typically not needed by the average small business retailer. Before moving forward with Lightspeed, you will want to carefully assess the inventory management needs of your business.

Vend – which is operated by Lightspeed – is another POS option with a user-friendly system and great customer support options. However, it struggles in the department of customer management, and it has a relatively weak e-commerce integration.

PayPal Zettle is another solution and it is completely free. While the tools are not as advanced, and it’s really not intended for a large-scale operation, it works well for small businesses and sole proprietors operating just one retail location. Plus, PayPal is a well-known and trusted company that even many large companies use to process payments, so it lends a certain level of credibility.

Who Needs a POS System?

Whether you are a small coffee shop or cafe or a big box retailer, odds are you will need a POS system. Based on the previously outlined functions of a POS system, can you think of any small business that would not need these services? The answer is probably no. POS systems are designed to perform critical functions for businesses of all sizes and finding the right retail POS system is one of the most important aspects of starting any successful retail business.

Identify What You Need In a POS System

The most important aspect of choosing a POS system is to first identify what exactly you think you need a POS system to do for your business in the first place. Grab a piece of paper and a pencil and start writing down all the different components and aspects of your business that you think a POS system can help you manage. Having a clear picture of exactly what you want to get out of a POS system will be a huge advantage as your try to narrow down which system is right for your business.

You should also try to categorize which features are most important to you and which ones are less important. There should be a core set of features that you know your business cannot go without. The other features, while nice add-ons, are features you can think about once you have homed in on the various POS systems that will be able to provide the core features you know you need.

Additionally, if you are planning to finance your small business and take out a loan, be sure to include the cost of a POS system in your calculations for your business plan.


Choosing a POS system is a foundational step in starting any business. As such, be sure to take some time thinking about what exactly you are looking for in a POS system. There are tons of great options on the market, and they can make a real difference in terms of streamlining your operation and allowing you to conduct business via almost any payment method. Plus, with so many relatively inexpensive and quality options available nowadays, there really is no reason to go without a great POS system as an SMB retailer. So, start looking! The sooner you find a POS system, the sooner your small business can start making money!


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