
Ask HN: Why are POS systems all POSes? - moron4hire
For the last 10, maybe even 15 years, I have been hearing from small business owners about how much their Point-of-Sale system sucks. It seems like a preopsterous situation. How can such a fundamental piece of software--one that is so fundamentally simple in its construction--continue to be a pain point for people?<p>Is it because POS is not as easy as it seems? Surely someone in the last ten years would have figured it out, though.<p>Is it because the users don&#x27;t understand how to use the systems properly? How then have we gone ten years without some startup pitching My First POS, and taken the owner&#x2F;operator business segment by storm?<p>Is it because the companies currently in the market are good at getting themselves entrenched with limiting contract terms (my observation has been that most businesses buy POS as a service, not as a product)?<p>Is it because good developers aren&#x27;t &quot;wasting their time&quot; with such trivial CRUD apps as POS?<p>It&#x27;s just very perplexing. I first encountered the crappy POS meme in highschool, working food service and retail jobs between classes. I had further insight into the ecosystem in my first job out of college--no, we weren&#x27;t in any way working on the subject, it was just that our favorite lunch spot could never keep their system running. And now, through the course of several interviews with local small business owners, it seems that nothing has changed.
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fredsanford
I worked at one of the bigger POS vendors in the very early 2000s. The primary
attribute of these folks seems to be how cheap they are. The 2 groups here
would spend 100K a year for a Java Developer and then supply NO tools. The
project I was on was still using Borland tools from the early '90s, including
the Borland database engine. Debugging was next to impossible, especially when
you used the networked "features."

What was really funny was they kept buying other companies to get their POS
systems, but they could not manage to get one that worked as well as the old
Borland based "thing"...

Java, fail

C#, fail

Modern C++, fail

It was rather amusing, especially after they chased off all the decent,
experienced in the field programmers they had that they wouldn't allow to
write the new stuff. They kept trying to buy it and failing.

The only thing I've seen worse is all the "video store management" software
out there in the days before Blockbuster got big. Mom and Pop video stores
were REALLY unwilling to spend any decent money on good software. I'm kinda
glad about that as that's what kept me alive in the very early '90s, fixing
all those Clipper, Dbase, Paradox and Flex "applications".

~~~
moron4hire
So basically it's the same reason most software sucks: because most companies
suck. Thanks for your insight, I appreciate it.

Years ago, when I was helping out my favorite bar get back on their feet, I
had thought it would be a good idea to develop a POS system. I wasn't capable
of it at the time, I was just out of college and knew very little about
running a project. Nowadays, I've got quite a bit of experience in inventory
and ERP systems, but I also understand the market a little better now. For one
thing, the people who complain the loudest are often the least willing to pay
more for better.

This all got started because my business partner and I were doing some on-the-
ground research into what makes a small business owner tick. We have an
investor who has a Great Idea that is completely unworkable without a ton of
data that these sorts of places are either uncomfortable providing or
unwilling to put in the effort of providing.

And one of the constant refrains we heard in our interviews was that these
people hated their POS system, knew it was partly their fault for not using it
correctly, but didn't have the time or inclination to get into it more. We're
talking owners of walk-in wine stores and pet grooming shops. Places where the
owner is behind the counter, running the place, or directly managing the
staff. They all opened their businesses because the business focus was
something they loved, but they ended up spending most of their time wrangling
data systems and tax compliance. It's a major frustration point for them and
we'd like to do something about it.

Do you have any insights into the types of support contracts that these sort
of places are running? I'm considering trying to sell my services as "labor
for hire" to help small business owners clean up and figure out how to best
use their POS. It's something I could get bootstrapped on right away and I
think it would build relationships that could lead to more business
opportunities. And it seems to fill the need that most of these owners have,
in that they know that their systems are a mess but they don't have the time
to do anything about it. But I'm concerned that the typical POS company has
their customers locked into a support contract that would not allow a 3rd
party access to the system.

~~~
fredsanford
Check out Sturgeons law... 90% of everything is crap. Some think he was an
optimist! :)

You've hit a few nails on the head, especially with the loudest complainers
being the least likely to spend money and the unwillingness to expend any
effort.

What I noticed with the few clients I visited for the POS vendor was that the
owners weren't busy, they were lazy and cheap. If your idea man's idea
involves getting people to do anything besides say yes or no on the phone, I
wouldn't bother unless you meet face to face with a few people that are really
enthusiastic and prove they're willing to make an effort. They will just
frustrate you and make you hate life otherwise. This is especially true for
any kind of banking or financial business such as mortgage brokers or credit
reporting agencies. I have yet to see a group of people less willing to spend
money or to try to cheat you out of it. Restaurant and bar owners would be
second on my list.

I didn't see much of the support portion of the POS business because the
majority of the people were in a different state, but, more than 1/3 of the
employees were in the training and support department at this particular
company. A support contract was required for any big business simply because
the customers wanted a neck to choke when something went wrong. Developers
could intuit a fair amount about what was going on with the customers due to
the problem tickets and CRM entries we saw.

If not for the support/training revenue I suspect the POS corp I worked for
would have been out of business years ago. However, they had some huge
customers that just wouldn't buy anything without a support contract. The mom-
and-pop customers paid per incident and screamed and hollered the whole time.
The large corps are locked into the POS support dept. The mom-and-pops are
not, but... I don't think you want to deal with them...

------
kumarvembu
I got into developing POS / retail management solutions in 2004 and founded
GoFrugal Technologies. When I started, it did seem like a low hanging fruit,
ripe and just waiting to be consumed

Close to 10 years and after engaging with 200,000+ retailers across India and
with 20,000+ customers in about 20 different types of retail businesses - I
have started appreciating the complexities of retail

The simple reasons why POS solutions are struggling to catch up fast with the
times are 1\. All retailers have the freedom to innovate at the front-end &
there are many others who push down innovation at the front-end to the
retailers : either because their customers are demanding or because the banks,
technology vendors, government and competitors are constantly pushing the
retailers to introduce change at the front end 2\. Retailers want to service
demand - come what may. The manufacturers continue to innovate on packaging,
pricing, promotions etc. and no one waits for the retailer's system to be
ready to handle these changes 3\. Retailers have to keep the cost per
transaction as low as possible to earn a profit. This, combined with the fact
that retail is different every 100 miles, makes it hard to build a universal
retail solution

I hope this explains why POS in most cases continues to be pain point for both
retailers and consumers

~~~
moron4hire
What do you mean by "retailers innovate at the front-end"? And what do you
mean by "innovate on packing, pricing, and promotions"? Shouldn't the shape of
the package or the specific price have no bearing on how the inventory and
sales are recorded?

~~~
atom-morgan
I may be able to help here since I worked as a data analyst in the grocery
world. I believe "retailers innovate at the front end" refers to the store
specific details that are created by giving individual stores some freedom.
For example, a product may be required to be on display at the front door of a
store but store and category managers are given the freedom to choose _which_
item it is. Big football game coming up near a NFL city? Maybe chips and soda.

As for packing, price, and promotions, it does have a bearing on how inventory
and sales are recorded. Product packages, prices, and promotions change all
the time and while it may be easy to keep track of sales, units sold, etc.,
the actual storage of this information is much more complex. Retailers need to
structure their data in a way that allows analysts to determine how the sales
were generated. In addition to knowing Coca-Cola had an increase in sales last
month, innovation on packing, price, and promotions lead to technical
requirements to know which specific UPC of Coca-Cola, at what specific price
point, under what promotion, and at what location in the store drove those
sales.

------
CyberFonic
My comments are primarily based on working for a supermarket chain with over
2000 stores and about 30,000 POS terminals. Subsequently, I've worked with
some smaller retailers.

First of all, managers and business owners buy these systems. But they don't
actually use them. They will sooner listen to the sales guy's pitch than the
bitching from the employees. When you pay customer service staff the minimum
wage that shows that you don't value them and as a boss, certainly know more
than they could possibly know.

I think you comments are based on 2nd generation systems, i.e. ones that are
more or less a PC with cash drawer and receipt printer attached. The big
manufacturers have cornered the market by claiming that "only they are big
enough to take care of your business." Typically the cost of customisation is
so high that POS screens, functions are not updated as business changes.

The 3rd generation systems, based on iPads and other tablets are shaking up
some segments. Of course, the struggle against the above two biases.

In case your wondering, 1st gen was stand-alone cash registers, whether
mechanical or electronic.

In any large business, e.g. a chain, the POS integrates with the ERP systems
to optimise the supply chain and distribution functions. This integration,
alone, snookers many smaller, newer entrants.

Of course, I think you have hit the nail on the head, it is CRUD, unglamorous
and once you confront the customisation and integration issues, a lot of hard
work. As Paul Graham would suggest, the hallmarks of a niche to profit from.

------
dangrossman
There's nothing fundamentally simple when you realize that the POS system is
just one of the many front-ends for the store's inventory management, sales
and cost reporting, barcoding and label printing, purchasing and tax
accounting software. If you ever have a chance to help open a new retail store
and actually see all the moving parts, you might want to take it, as you'll
learn why POS software isn't as simple as it looks, and why the affordable
ones are limited to small single-store establishments in specific industries.

Just handling taxes in a piece of software meant to be used in multiple
locations can be hideously complex, and that's just 1% of what the system is
responsible for. Remember that not only do the tax rates differ from one half
of a town to the next, but what items are taxable do too.

~~~
moron4hire
You make a good point. I guess in the general case it's "not simple". I've
built a number of inventory and ERP systems, so it's kind of my wheelhouse
now. But yes, such systems aren't necessarily trivial without a rock solid
design. I can build a goodish ERP system now because I have experience, but to
someone just entering the field it has a lot of good looking corners that turn
out to be awful decisions.

------
lancewiggs
Do check out Vend (1) who are looking to change this paradigm.

Here are some thoughts.

The POS business is littered with devices that were designed for purpose by
giant companies like NCR and IBM. Their primary customers were very large
corporate retailers, the cost per unit and for development was prohibitively
high and because these were giant corporate IT projects the results were awful
for the end users.

At the lower end the retailers got those really basic electronic cash
registers (ECRs)with lots of buttons and LCD displays showing numbers only.
These were out of Japan mostly and usability was not a priority.

The biggest issue with these ECRs was that they were trying to solve too many
end-user requirements, so they all sucked for all but the most simple
transactions.

With the PC a bunch of DOS and then windows based retail POs systems emerged -
mostly awful usability due to Windows and DOS. The best did made it very
efficient for a particular industry. E.g. for service stations their systems
were integrated with the pumps in the forecourt and a back office system, all
of which likely linked to the oil company. But it all stalled for years until
the cloud and iOS based systems came along.

Right now we are in a moment of rapid change, with the end-user experience
becoming hugely better for both the customer and the retail assistant. Still
plenty to come so watch this space.

(Source 4 years in Mobil Oil, 2 doing payments and POS projects, 2 in the
field, and I'm an investor in Vend)

(1) [http://vendhq.com/](http://vendhq.com/)

~~~
dangrossman
Vend has an awful lot of stupid bugs, and pretty inept front-line support.
Even with reproduction steps and screenshots, they don't seem to understand
tickets reporting bugs at all. It can take multiple back-and-forths before
they escalate it to someone in dev that _might_ try to fix it.

An example they just fixed after I handed them the bug and the fix -- they
handled discounts on a purchase (i.e. a coupon, or F&F discount) by adding a
special "Discount" product to the sale. In their database, hidden to the store
owner, this "Discount" product was flagged as a taxable item with negative
value. If someone wanted to buy a $10 item and handed you a $10 coupon in a
state with 7% tax, the register would tell the cashier to give the customer
$0.70 in change, and take $0.70 out of the month's tax you owe to the state.
There were similar glitches in basic, critical calculations in inventory
tracking, cost of goods sold, etc. There were oddities like if you used a
barcode scanner, and had mis-typed a barcode when adding a product to
inventory and lost a digit, the scanner would still pull up the product via
the partial match, and it'd also add sales tax to that item even if it was
marked as a non-taxable product (i.e. groceries in a state that doesn't tax
them). So someone doing inventory could mess up your sales tax collection on
that product for the whole year and it might never be noticed.

It's not a solid product, and the only reason we still use it is its
integration with our Shopify store to keep the website inventory updated as
items sell out in the retail store.

~~~
hrrsn
That last line is a serious dealbreaker. We run Lightspeed Pro POS at our two
retail locations, and while it is great it still does some things stupid. On
the bright side, it does sync with Magento for our website.

~~~
hexley
Is it still written in RealBASIC?

------
MrMeker
It's well known that POS also means "piece of shit".

I'm not sure how open it is for disruption, nor if it really is enough of a
pain point to be worth replacing. Google has tried with Google Wallet, but who
uses that?

One thing I have seen is that Girl Scouts are using some attachment on an
iPhone to take credit cards at cookie sales. I'm not so sure that this would
be useful in a restaurant setting or in a checkout process at a department
store. It seems to me that these two use cases cover a large fraction of
credit card purchases.

~~~
moron4hire
I though Wallet was more of a payment system, to compete against the likes of
PayPal, then a Point-of-Sale system?

------
Philadelphia
Probably because the people who buy the systems aren't the ones using them.
Price and feature checklists become the main factors, rather than how suitable
the software is for actual use. It's the converse of the point about Apple
from that article that's been going around
([http://stratechery.com/2013/clayton-christensen-got-
wrong/](http://stratechery.com/2013/clayton-christensen-got-wrong/)).

------
belthasar
I've been working on a mobile POS for vendors at markets and fairs for the
last year or so. I built it mainly so that my wife could keep track of things
when selling her stuff at conventions.

I think one problem is that everyone wants something different. I've been
contacted by people who run festivals that want very specific functionality.
It is hard to build that while keeping a feature set that most other people
would find useful.

------
orenmazor
it doesn't have to be a pos! :)
[http://www.shopify.com/pos](http://www.shopify.com/pos)

obviously biased, because I work at Shopify. but this is a sweet product, and
it works with your online store for inventory tracking, reports, etc.

------
aclevernickname
I used to do Tier 4 support for a now-defunct (3rd Largest) grocery store in
the US, and NCR has a stranglehold on this market. Every Self-CheckOuT lane
with the same voice is probably an unbranded NCR SCOT. I've seen them in Home
Depot, Loblaw's/Superstore, and even in some surprising locations (a
nursery/greenhouse). Everyone uses the same terminals. It's been ripe for
disruption for nearly a decade now.

LemonPOS[1] has been around for ages, is Free Software, and works great. It'd
take very little effort to undercut the big guys in this market with a tiny
agile startup.

[1] [http://lemonpos.org/](http://lemonpos.org/)

------
nickzoic
Not my company but check out Kounta
[http://www.kounta.com/](http://www.kounta.com/)

~~~
moron4hire
thanks, I will.

