There are complications in the retail floral industry that make choosing a good POS/CRM system particularly complicated. These questions should help you find a system that you love and prevent you from making an expensive mistake.
Is there a contract or other commitment?
Almost any POS system designed for retail florists is going to involve some ongoing (monthly, yearly, etc.) fees so the length of any contract or agreement that you sign is critical. If you realize two months into a five year agreement that you don’t like the system you still have almost 60 payments ahead of you. And if you close or sell your store you likely have to buy out the entire contract.
Long term contracts are largely a thing of the past with business software. Even enterprise solutions like Salesforce or SugarCRM use what is known as the SaaS or “Software As A Service” model – one that means you subscribe to the software and pay only for as long as you find it useful.
Most floral POS systems have followed this trend. There are so many options that don’t involve a long term contract it’s hard to justify choosing a system that does.
What up-front costs are involved with the POS system?
For many years the companies that sold POS software for florists charged a large (usually thousands if not tens of thousands) up-front fee. This “sunk cost” meant that not only were florists tied to a system because of a contract but because of the money they had invested.
Over the last ten years there has been a shift in the way business software is sold. Just as the SaaS model did away with long term contracts it also helped end the era of large up front investment. Now you just pay on a subscription basis for as long as you use the software.
So many POS systems for florists bill on a monthly (often with an annual option) that it’s hard to justify making a large up-front investment.
If you do choose a system that involves an up-front investment you need to be careful. First make sure that you have an absolutely clear understanding of the total cost of getting a system up and running. This will include the software itself, the hardware (if included), the installation (if required), the initial training, etc.
Do not leave any potential cost “to be determined”. The expenses involved with having an installer and/or trainer come to your store and stay for a week or more can be very high.
You should do this early in your discussions with your sales rep. There is a common practice in which the sales rep starts with a low number and then starts mentioning more and more fees as talks move along and they see you getting closer to making a commitment.
Do I have to buy hardware?
There was a time, in the early days of POS systems for florists, that computing hardware (especially networking hardware and POS peripherals like receipt printers and bar code scanners) were hard to come by. Add in the fact that many early adapters did not have any computers in their stores and it made sense for POS vendors to offer hardware.
It rarely makes sense any more. All hardware is inexpensive and readily available. The POS vendors does not add any value to the hardware they sell, but if they’re acting as the middleman they do have to get paid. And frequently the hardware they sell is outdated and underpowered. They can make it look attractive by bundling a lot of impressive looking hardware and charging low monthly payments over five or more years, but the total cost is exorbitant and long term financing on computer hardware is ill-advised.
The good news is that most shops now already have hardware in their stores, and it’s reasonable to expect that they should be able to use it with a new POS system. Existing hardware less than two years old should be fine, and hardware as old as five years may also suffice.
Is Printing Automated?
This is one of the areas where software for florists really differs from software for general retail and the question deserves special attention.
In most retail most users are only interested in printing receipts, credit card slips, etc. Most printing jobs go to the same device (the receipt printer) and that is easy to automate. On a less frequent basis a manager or owner might want to print a letter-sized report and they can simply select a different printer.
The flower business is very different. Consider a delivery order. It will typically involve three different jobs going to three different printers. First there is the receipt for the customer, which typically goes to the receipt printer. Then there is a worksheet, which usually goes to a standard printer, preferably in the design area. Finally there may be an enclosure card, using specific card stock from a different printer (or a different tray on the same printer).
Many florist realize too late that some systems do not automate printer selection. Instead the user must manually select each printer for each job type – a time consuming and unpleasant task as the best of times, and a disaster during peak periods like Valentine’s Day or Mother’s Day.
What are the training costs with the POS system?
There are generally two types of training. Traditionally there was initial training that took place when the system was first installed, just prior to “going live”. Follow-up training would take place later – training for new employees, training on changes and new features after updates, etc.
Again this has changed. Software is now more user-friendly and self-explanatory, and features are (or at least should be) more discoverable. That means that expensive on-site training is largely a thing of the past.
If your system will involve training costs those figures should be included in the total start-up costs mentioned earlier – be sure you get specific details. There have for example been reports of sales reps quoting one price for initial training but not disclosing that it only included (for example) two employees. Training more employees added significantly to the training cost.
What are the ongoing costs of the POS system?
Most systems involve some ongoing costs. Even those that come with a large up-front fee and the promise that you “own it forever” are likely to involve recurring fees. These may be monthly and/or quarterly and/or annual in nature. There may also be transaction fees.
Sometimes florists are not even aware of these charges until after they sign the contract
and get their first statement. More commonly these fees are not disclosed until late in
the sale process. For example you may see only the up-from figure mentioned until you
are about to sign the contract – at which time you notice extra monthly or yearly charges
Don’t waste any time! Get all of the costs nailed down right away. Tell your sales rep that you want to see all costs associated with using the system right from the start.
These charges generally fall under (but are not limited to) any of the following categories:
- Access Fees
- Maintenance Fees
- Usage Fees
- Sending Fees
A true SaaS model should make this evaluation much simpler. It will always be simpler to choose a SaaS system that includes all costs in a single figure that is charged on an ongoing basis.
What are the expected upgrade costs of the POS system?
First – the difference between software updates and upgrades. Updates generally mean small changes to a system – usually to fix minor problems that have surfaced after the system was released. These should always be free – there will always be little problems that come up and the software provider is expected to fix them. Don’t let anyone tell you they are doing you a favor by providing free updates – that is their responsibility.
Upgrades are different. An upgrade improves software by, for example, adding new features, making it faster or easier to use, etc. Whether you pay for updates depends on your agreements with the vendor and their business model.
With the SaaS model you shouldn’t have to worry – this model assumes that as long as your subscription is current you will have access to the most current version of the software. That means free updates and upgrades.
If however you “bought” your software (that big upfront fee again) things can be very different. You may have to pay a substantial amount for – it’s not unusual to have to pay as much as 60% of the original purchase price to purchase a major upgrade. And you may not have a choice – vendors can “kill” older versions to force you to pay for an expensive upgrade.
What future development is planned for the POS system?
This is an important question all on it’s own but it is also linked to the upgrade question
First and most importantly you want to make sure that a system is undergoing continued
development. To be sure you should ask for details (in writing) of the development taking place, new features being implemented, release dates, etc.
You need to be absolutely clear that this development relates to the system you are purchasing. If your sales rep can’t produce this information there is a very good chance that development on the system has ceased. You are looking at purchasing a “dead” system. It may work for now but it is essentially obsolete, and you will have to replace it in the relatively near future.
Sometimes a POS software provider will take a dead system (one that they are no longer developing) and aggressively market it to florists with severely discounted pricing, etc. They sell these systems at discount prices because they know the you will have to replace them within a few years.
Forget about upgrades – you are now talking about purchasing an entirely new system!
If there is ongoing development you will have different questions. You will want to know
when the next major release is scheduled and what the cost will be. You wouldn’t want to buy a $25K system in January if you knew that you would have to buy a $15K upgrade in March.
Again the SaaS model addresses most of these concerns. As long as there is ongoing development you will have access to the latest and greatest version. If development stops you can quit the system (and move to another) without penalty.
Will I lose any rebate revenue in this deal?
This is very important and complicated question that comes up if you are buying a system from a wire service. Here is the simplest possible example:
A wire service offers you a free system, but you will have to give up your rebates.
If you wire out just a few orders a day your “free” system may actually be costing you more than $500 per month when you consider the rebate income you will be losing.
Will I have to use a certain Merchant Service Provider to process my credit card sales?
Most systems out there will force you to process your credit card transactions through a
certain merchant service provider.
If this is the case with the system that you are looking at then you need to take a long hard look at the processing rates and how they relate to the fees you are paying now or, more importantly, the fees you could be paying now.
If the rates you will have to pay are more than the lowest possible rates you could be paying then you will have to factor this in as part of the cost of the system. This kind of hidden fee can add hundreds of dollars a month to the true cost of running a POS system in your flower shop.
You also need to pay very close attention to the terms of the processing agreement. Some contracts allow the POS vendor to access your credit card funds under certain circumstances. For example – you fall behind on your POS or wire service payments. This triggers a clause that allows the vendor to take all of the money you process as credit card payments until the entire contract – plus a substantial penalty – are paid off. There are florists that took a few days to realize that their credit card clearing was not coming through to their bank account – instead the POS vendor was effectively seizing all of it.
The best possible option is a system that lets you choose whatever merchant services provider you like. This means you are free to shop around and choose the provider that gives you the lowest possible rates. It also ensures that the POS provider cant access your clearing directly.
Can I take my data if I switch to another POS system?
One of the main reasons florists adopt a POS system is because they want to collect
valuable marketing information – customer contact information, event reminders, etc. This data will be stored in your POS system.
No matter what your POS sales rep tells you, no matter how much you love the system
you are looking at, you have to assume that at some point you are going to want to get that data out of the system.
There are lots of possible reasons. You might want to switch to a different system. You
might decide to get out of the business and want to sell your customer list to another florist. You might want to trade lists with a local gift store. There are countless reasons why you might want to export your data.
That means you need to be sure that you can get it out, and get it out in a usable format. A set of mailing labels or printed list of customers is not enough. You need to get it out in a digital format that you can then work with or import into another system.
Make sure the system you are looking at allows you to do this. Get the policy in writing
from the rep. It’s that important.
Who has access to the marketing information that I collect?
As we mentioned you are going to use your POS system to collect a lot of valuable
marketing information like customer names, phone numbers, and e-mail addresses.
Some florists firmly believe that their systems are sharing this data against their will. They believe that the POS vendor is taking customer information from the fl orist’s database and using it to market to the florists customers.
The example you hear most often concerns a florist who uses their system to send
marketing e-mails to their customers. Some believe that a month or so later those same
customers start getting e-mails from the POS vendor encouraging the customer to buy
flowers from their website.
There is no proof that this happens. It represents a very serious breach of trust and it’s hard to believe that vendor would be so bold.
There is however no harm in asking. Simply ask your sales rep to clarify (in writing) their policy on this issue.
How does the POS system work with my wire services?
This is a complicated question. Any system can claim to work with any wire service, but what really matters is the degree to which the two are compatible, and how much time, energy and money the POS system can save you when dealing with a particular service.
Because it is so complicated the best approach is to ask the sales rep to show you exactly how their POS system works with the wire services you use. You should also listen to the rep – they may offer compelling reasons to switch wire services.
Is the system tied to a wire service?
Many of the POS systems available are developed, supported and sold by the major wire services. If the POS system you are looking at is one of these you need to consider whether you are committed to remaining a member of that wire service for the duration of the contract. You typically will not be able to use the POS unless you are a member in good standing, but you have to keep making payments even if you aren’t.
Using a POS system from a wire service strengthens your connection
to that service. You should not choose a wire service POS system unless you are
happy with that wire service and plan to remain a member for a long time.
Many, possibly most, have e-commerce websites that allow online shoppers to purchase from a website. Ideally that website then passes the order information directly into the POS system so that the user does not have to re-enter it manually.
A good floral POS system will integrate with websites from several of the best providers of commerce websites for florists. An even better POS system will offer a proven API that allows other website providers to integrate. If you have a custom website that you love a good API will let it, with a little work, pass order information right into the POS.
This is another one of those areas where the flower business really differs from regular retail.
Most retail involves selling one or more items to a single customer – what is referred to in the floral industry as a cash & carry sale.
Most flower sales are different – they are made up of orders, which involve one or more items that are going to be delivered to (or picked up by) a specific person on a particular date and time.
And, often, a customer wants to place two or more orders at the same time. Maybe it’s Mother’s Day flowers for his wife, mother and mother-in-law. Sometimes it’s Valentine’s Day flowers for multiple paramours. Maybe it’s a holiday gift for everyone in the office, or each major client. It happens.
When it does… how does a system handle it? Can you have a single sale with one payment and one receipt that includes orders for different people and/or dates? Or do you have to ring in each of those orders as a separate sale? Entering the customer each time, collecting payment each time, issuing a receipt each time…
Sales with multiple orders are a staple of the flower business. A POS system for florists should be able to handle them, and handle them gracefully – you shouldn’t have to jump through hoops to make something so basic work.