It's Not Easy Being A POS VAR

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What would you do if your friend from across the country called and asked, “I’m thinking about starting my own business as a POS VAR. What do you think?” Would you encourage him and give some of your sage advice, or would you tell him he was crazy and was better off becoming a professional gambler? I’m guessing a lot of people would choose the latter response, and not because they want to discourage other competitors from entering the market. Any POS VAR knows this is a tough business to be in today. Slim margins, increased competition from Internet resellers, and reverse auctions are the typical laments I hear from the POS channel. So, without a guaranteed customer base to build from, entering this market from scratch would indeed be an uphill climb. But what kind of future is there for an existing POS VAR?

After speaking with various VARs, vendors, and distributors on this topic, I’ve learned that the best answer to this question is — it depends. Everyone said that growing in the POS market depends on your willingness to adapt or tweak your sales model. If you’re intent on selling POS the same way your father and grandfather did, you may stay in business, but you won’t grow very much. There are a lot of these “lifestyle” types of POS VARs, and honestly, there’s nothing wrong with that. But the goal of Business Solutions is to show you ways to grow your business. To do so, there are a few points to consider.

First, consolidation is happening in the POS channel. Smaller VARs are being gobbled up by larger VARs, creating even larger VARs. These big guys will have more feet on the street and be a more attractive option to some of the mid-tier and top-tier accounts you may have been courting. This could cause you to change the size of company you pursue. Consequently, to grow with smaller customers, you’ll have to make sure you’re getting the most out of your existing customer base. This may require a change in the types of products you sell, which is the second point you need to consider. Some of the current hot technologies POS VARs are adding successfully include kiosks, digital signage, and security products such as digital video recorders and remotely manageable camera systems. For the latter, sometimes the value to your client is not just increased security, but improved productivity. For instance, a store owner who can monitor multiple locations from a single site not only can reduce travel between sites, but determine if a store has its products displayed properly and if the employees are staying busy. (For more on this topic, see the Tech Trends article on page 8.)

The high interest in these complementary technologies is encouraging for VARs seeking SMB clients. And there’s more good news in general for POS VARs. Since the average life span of POS equipment is seven years, all of those companies that upgraded because of Y2K will be seeking new POS solutions this year or next. So, maybe that friend of yours who wants to be a POS VAR isn’t as crazy as you first thought. Of course, you’ll still tell him he’s crazy, but he’ll be in good company.