How To Calculate The Total Cost Of Ownership Of A POS System: A Real-Life Comparison

At Bematech, we understand how hard it is for businesses to determine exactly what a new Point of Sale (POS) system will cost. They usually don’t have any trouble calculating the upfront “sticker” price, but businesses sometimes have a more difficult time determining the total cost of ownership (TCO) of the system. TCO looks beyond initial costs and takes all costs associated with the system into account over the time it is used by the company.

It’s a very common scenario to research several POS systems and find that they are comparable in initial price, but that their TCO varies greatly.

We performed a cost analysis on three POS systems to illustrate this point. The data is based on a real-life situation in which a merchant is faced with the choice of three comparable systems. For this comparison, we’ll refer to the business as “Average Joe’s Coffee Shop.”

Average Joe’s sells about 230 cups of coffee per day, along with foods like fruits, parfaits, pastries, and even fresh sandwiches and soups. Their average annual sales are about $350,000. Each day, their sales total approximately $970, and they have an average of 200 credit card transactions per day. The average amount of these transactions is around $4.85.