Course Project
Content
IS535 1 Introducing Point of Sales
Introducing Point of Sales Technology at Village Cheese Shoppe
Mihnea Grecu
Keller Graduate School of Management
IS535 2 Introducing Point of Sales
Introduction The purpose of this paper is to present the current setup of the Village Cheese Shoppe in terms of inventory systems and the benefits of implementing a Point of Sales system. The goal of implementing the system is to increase the accuracy of inventory, keep track of itemized sales and help with future and accurate restock. Background of the company Village Cheese Shoppe is a gourmet food retail store and deli located in Southampton, New York and was established in 1974. It was operated by the same family till 2009 when ownership changed. In such of competitive economic environment the change was necessary in order to improve the old fashion services. For a small location the deli serves breakfast and lunch 7 days a week. There is an extensive menu that customers can enjoy in a small sitting area or takeout. In addition to the deli the place has been known for years as a gourmet. As the name mention cheese is the main item accompanied by lot of other shelf products. An estimated number of shelf products can go up to 3000 items for a busy summer season. Over the years Village Cheese Shoppe has grown and extended the inventory. The new ownership invested in advertising, improving the image and developed new products. All these result in an increase of the volume of the business to the point where there is a need for improvement.
IS535 3 Introducing Point of Sales
Current Business Environment Village Cheese Shoppe is a profitable company and manages to be successful in the current tough economic times. Due to prime retail location the rent represents a high percentage of operational costs. Other costs that are “biting” more and more of the net profit are: high fuel costs and delivery charges, environmental changes that lead to higher food costs. Being a food retail business there is always the huge overhead of perishable items. Current costs with shelf items represent 18.31% from the gross sales and food costs represent 19.62% from gross sales. In order to become more efficient and have an accurate image of the most sold items that can increase the sales and lower the costs a POS system is the answer. By introducing this system Village Cheese Shoppe will be able to see what shelf products are most popular and have the quickest turn out. A shelf product that moves quickly generates the necessary cash flow for the business. Also by using the POS system the store manager can notice easily the buying trends so he can stay focused and order the “trendy” items.
System Characteristics
The retailing industry is one of the predominant users of POS terminals.
A Retail Point of Sales system typically includes a computer, monitor, cash drawer, receipt printer, customer display and a barcode scanner, and the majority of retail POS systems also include a debit/credit card reader. It can also include a weight scale, integrated credit card processing system, a signature capture device and a customer pin pad device. More and more
IS535 4 Introducing Point of Sales
POS monitors use touch-screen technology for ease of use and a computer is built in to the monitor chassis for what is referred to as an all-in-one unit. All-in-one POS units save valuable counter space for the retailer. The POS system software can typically handle a myriad of customer based functions such as sales, returns, exchanges, layaways, gift cards, gift registries, customer loyalty programs, BOGO (buy one get one), quantity discounts and much more. POS software can also allow for functions such as pre-planned promotional sales, manufacturer coupon validation, foreign currency handling and multiple payment types.
The POS unit handles the sales to the consumer but it is only one part of the entire POS system used in a retail business. “Back-office” computers typically handle other functions of the POS system such as inventory control, purchasing, receiving and transferring of products to and from other locations. Other typical functions of a POS system are to store sales information for reporting purposes, sales trends and cost/price/profit analysis. Customer information may be stored for receivables management, marketing purposes and specific buying analysis. Many retail POS systems include an accounting interface that “feeds” sales and cost of goods information to independent accounting applications.
Retail or restaurant single-register "starter kits" range from $1,500-$2,500; more elaborate, multiple-station systems with features such as touch-screens, automatic ordering and sophisticated reporting capabilities can cost $15,000-$20,000 and up.
At the core of a POS system is a standard computer running specialized software and hooked up to a cash drawer/machine, a monitor and a receipt printer; depending on the price, a POS system may also include a bar code scanner and a credit card reader. POS systems are often
IS535 5 Introducing Point of Sales
sold pre-configured, or those with technical expertise can buy the components and software separately, and add additional hardware as their needs (and business) grow.
Industry-specific systems are available for industries such as beauty salons, auto repair shops and dry cleaners
The more your system has in terms of equipment and report-generating capabilities, the more it will cost. Often it's best to start simple, but with a system that allows you to expand later on.
Track and manage inventory using any stock and sales method and inventory types that include standard, serialized, kit, assembly, matrix, lot matrix, voucher, non-inventory, and weighed. Manage complex, multidimensional inventory requirements with easy-to-use matrix forms. Track item movement and supplier histories, quickly generate purchase orders, and add items on the fly. Conclusions Analyzing all the given information the Village Cheese Shoppe should take into consideration the installation of a POS system that best fits their needs. The investment return for a POS system will be short and will be facilitated by efficiency in ordering the right product, better timing in restocking inventory. Also the POS system will help tracking sales in the deli department and trimming on the menu items. Fewer items with a higher quality can satisfy the customer needs.
IS535 6 Introducing Point of Sales
The best way to start this investment is by buying a smaller basic POS system (Intuit – QuickBooks – Point of Sale), that can be upgraded later. . This would make a better match due to the fact that Village Cheese Shoppe is already using QuickBooks as a book keeping system, so the compatibility would be easy. The initial investment would be around $5,000, including software, hardware and supplies. By introducing the POS and learning to order correctly the sales could be increased with $300 per day on average. Considering the retail mark-up of 100% the NET profit would be $150 per day and as a result the return on the initial investment will be covered within a month. Once the system in put in place and Village Cheese Shoppe management learns how to use the system at full capacity, the nest step for an upgrade can be take and the benefits will increase considerably. Due to the fast return on the initial investment Village Cheese Shoppe should invest in a Intuit – QuickBooks POS immediately. References US Census Bureau
IS535 7 Introducing Point of Sales
Current Monthly Sales
Taxable sales NonTaxable sales TOTAL SALES
Date
Taxes
August 1, 2009 August 2, 2009 August 3, 2009 August 4, 2009 August 5, 2009 August 6, 2009 August 7, 2009 August 8, 2009 August 9, 2009 August 10, 2009 August 11, 2009 August 12, 2009 August 13, 2009 August 14, 2009 August 15, 2009 August 16, 2009 August 17, 2009 August 18, 2009 August 19, 2009
3,390.44 2,455.91 1,933.99 1,657.42 1,564.36 1,872.91 2,320.93 3,144.17 2,798.42 1,601.16 1,306.56 1,474.23 1,824.24 2,297.55 3,327.27 2,586.90 1,856.57 1,955.48
3,241.03 2,915.67 1,575.09 1,804.06 1,712.79 1,959.63 2,747.25 3,560.74 3,097.91 1,557.04 1,526.89 1,892.70 2,027.39 2,576.29 3,865.73 2,901.36 1,998.33 2,140.86
292.43 211.82 166.81 142.95 134.93 161.54 200.18 271.18 241.36 138.10 112.69 127.15 157.34 198.16 286.98 223.12 160.13 168.66
6,923.90 5,583.40 3,675.89 3,604.43 3,412.08 3,994.08 5,268.36 6,976.09 6,137.69 3,296.30 2,946.14 3,494.08 4,008.97 5,072.00 7,479.98 5,711.38 4,015.03 4,265.00
IS535 8 Introducing Point of Sales 1,569.33 August 20, 2009 August 21, 2009 August 22, 2009 August 23, 2009 August 24, 2009 August 25, 2009 August 26, 2009 August 27, 2009 August 28, 2009 August 29, 2009 August 30, 2009 August 31, 2009 1,798.55 2,438.50 2,800.84 2,394.64 1,655.75 1,422.05 1,545.75 1,548.95 1,834.11 1,571.34 1,664.68 1,498.69 1,944.12 1,929.56 2,780.54 3,457.57 2,749.46 2,001.99 1,503.86 2,006.25 1,808.62 2,953.58 2,466.49 2,202.49 1,758.57 135.35 155.12 210.32 241.57 206.54 142.81 122.65 133.32 133.60 158.19 135.53 143.58 129.26 TOTAL 63,111.69 72,663.86 5,443.38 141,218.93 3,648.80 3,883.23 5,429.36 6,499.98 5,350.64 3,800.55 3,048.56 3,685.32 3,491.17 4,945.88 4,173.36 4,010.75 3,386.52
Projected Monthly Sales
TOTAL
67,761.69
77,313.86
5,844.45
150,920.00
IS535 9 Introducing Point of Sales
Introducing Point of Sales Technology at Village Cheese Shoppe
Mihnea Grecu
Keller Graduate School of Management
IS535 2 Introducing Point of Sales
Introduction The purpose of this paper is to present the current setup of the Village Cheese Shoppe in terms of inventory systems and the benefits of implementing a Point of Sales system. The goal of implementing the system is to increase the accuracy of inventory, keep track of itemized sales and help with future and accurate restock. Background of the company Village Cheese Shoppe is a gourmet food retail store and deli located in Southampton, New York and was established in 1974. It was operated by the same family till 2009 when ownership changed. In such of competitive economic environment the change was necessary in order to improve the old fashion services. For a small location the deli serves breakfast and lunch 7 days a week. There is an extensive menu that customers can enjoy in a small sitting area or takeout. In addition to the deli the place has been known for years as a gourmet. As the name mention cheese is the main item accompanied by lot of other shelf products. An estimated number of shelf products can go up to 3000 items for a busy summer season. Over the years Village Cheese Shoppe has grown and extended the inventory. The new ownership invested in advertising, improving the image and developed new products. All these result in an increase of the volume of the business to the point where there is a need for improvement.
IS535 3 Introducing Point of Sales
Current Business Environment Village Cheese Shoppe is a profitable company and manages to be successful in the current tough economic times. Due to prime retail location the rent represents a high percentage of operational costs. Other costs that are “biting” more and more of the net profit are: high fuel costs and delivery charges, environmental changes that lead to higher food costs. Being a food retail business there is always the huge overhead of perishable items. Current costs with shelf items represent 18.31% from the gross sales and food costs represent 19.62% from gross sales. In order to become more efficient and have an accurate image of the most sold items that can increase the sales and lower the costs a POS system is the answer. By introducing this system Village Cheese Shoppe will be able to see what shelf products are most popular and have the quickest turn out. A shelf product that moves quickly generates the necessary cash flow for the business. Also by using the POS system the store manager can notice easily the buying trends so he can stay focused and order the “trendy” items.
System Characteristics
The retailing industry is one of the predominant users of POS terminals.
A Retail Point of Sales system typically includes a computer, monitor, cash drawer, receipt printer, customer display and a barcode scanner, and the majority of retail POS systems also include a debit/credit card reader. It can also include a weight scale, integrated credit card processing system, a signature capture device and a customer pin pad device. More and more
IS535 4 Introducing Point of Sales
POS monitors use touch-screen technology for ease of use and a computer is built in to the monitor chassis for what is referred to as an all-in-one unit. All-in-one POS units save valuable counter space for the retailer. The POS system software can typically handle a myriad of customer based functions such as sales, returns, exchanges, layaways, gift cards, gift registries, customer loyalty programs, BOGO (buy one get one), quantity discounts and much more. POS software can also allow for functions such as pre-planned promotional sales, manufacturer coupon validation, foreign currency handling and multiple payment types.
The POS unit handles the sales to the consumer but it is only one part of the entire POS system used in a retail business. “Back-office” computers typically handle other functions of the POS system such as inventory control, purchasing, receiving and transferring of products to and from other locations. Other typical functions of a POS system are to store sales information for reporting purposes, sales trends and cost/price/profit analysis. Customer information may be stored for receivables management, marketing purposes and specific buying analysis. Many retail POS systems include an accounting interface that “feeds” sales and cost of goods information to independent accounting applications.
Retail or restaurant single-register "starter kits" range from $1,500-$2,500; more elaborate, multiple-station systems with features such as touch-screens, automatic ordering and sophisticated reporting capabilities can cost $15,000-$20,000 and up.
At the core of a POS system is a standard computer running specialized software and hooked up to a cash drawer/machine, a monitor and a receipt printer; depending on the price, a POS system may also include a bar code scanner and a credit card reader. POS systems are often
IS535 5 Introducing Point of Sales
sold pre-configured, or those with technical expertise can buy the components and software separately, and add additional hardware as their needs (and business) grow.
Industry-specific systems are available for industries such as beauty salons, auto repair shops and dry cleaners
The more your system has in terms of equipment and report-generating capabilities, the more it will cost. Often it's best to start simple, but with a system that allows you to expand later on.
Track and manage inventory using any stock and sales method and inventory types that include standard, serialized, kit, assembly, matrix, lot matrix, voucher, non-inventory, and weighed. Manage complex, multidimensional inventory requirements with easy-to-use matrix forms. Track item movement and supplier histories, quickly generate purchase orders, and add items on the fly. Conclusions Analyzing all the given information the Village Cheese Shoppe should take into consideration the installation of a POS system that best fits their needs. The investment return for a POS system will be short and will be facilitated by efficiency in ordering the right product, better timing in restocking inventory. Also the POS system will help tracking sales in the deli department and trimming on the menu items. Fewer items with a higher quality can satisfy the customer needs.
IS535 6 Introducing Point of Sales
The best way to start this investment is by buying a smaller basic POS system (Intuit – QuickBooks – Point of Sale), that can be upgraded later. . This would make a better match due to the fact that Village Cheese Shoppe is already using QuickBooks as a book keeping system, so the compatibility would be easy. The initial investment would be around $5,000, including software, hardware and supplies. By introducing the POS and learning to order correctly the sales could be increased with $300 per day on average. Considering the retail mark-up of 100% the NET profit would be $150 per day and as a result the return on the initial investment will be covered within a month. Once the system in put in place and Village Cheese Shoppe management learns how to use the system at full capacity, the nest step for an upgrade can be take and the benefits will increase considerably. Due to the fast return on the initial investment Village Cheese Shoppe should invest in a Intuit – QuickBooks POS immediately. References US Census Bureau
IS535 7 Introducing Point of Sales
Current Monthly Sales
Taxable sales NonTaxable sales TOTAL SALES
Date
Taxes
August 1, 2009 August 2, 2009 August 3, 2009 August 4, 2009 August 5, 2009 August 6, 2009 August 7, 2009 August 8, 2009 August 9, 2009 August 10, 2009 August 11, 2009 August 12, 2009 August 13, 2009 August 14, 2009 August 15, 2009 August 16, 2009 August 17, 2009 August 18, 2009 August 19, 2009
3,390.44 2,455.91 1,933.99 1,657.42 1,564.36 1,872.91 2,320.93 3,144.17 2,798.42 1,601.16 1,306.56 1,474.23 1,824.24 2,297.55 3,327.27 2,586.90 1,856.57 1,955.48
3,241.03 2,915.67 1,575.09 1,804.06 1,712.79 1,959.63 2,747.25 3,560.74 3,097.91 1,557.04 1,526.89 1,892.70 2,027.39 2,576.29 3,865.73 2,901.36 1,998.33 2,140.86
292.43 211.82 166.81 142.95 134.93 161.54 200.18 271.18 241.36 138.10 112.69 127.15 157.34 198.16 286.98 223.12 160.13 168.66
6,923.90 5,583.40 3,675.89 3,604.43 3,412.08 3,994.08 5,268.36 6,976.09 6,137.69 3,296.30 2,946.14 3,494.08 4,008.97 5,072.00 7,479.98 5,711.38 4,015.03 4,265.00
IS535 8 Introducing Point of Sales 1,569.33 August 20, 2009 August 21, 2009 August 22, 2009 August 23, 2009 August 24, 2009 August 25, 2009 August 26, 2009 August 27, 2009 August 28, 2009 August 29, 2009 August 30, 2009 August 31, 2009 1,798.55 2,438.50 2,800.84 2,394.64 1,655.75 1,422.05 1,545.75 1,548.95 1,834.11 1,571.34 1,664.68 1,498.69 1,944.12 1,929.56 2,780.54 3,457.57 2,749.46 2,001.99 1,503.86 2,006.25 1,808.62 2,953.58 2,466.49 2,202.49 1,758.57 135.35 155.12 210.32 241.57 206.54 142.81 122.65 133.32 133.60 158.19 135.53 143.58 129.26 TOTAL 63,111.69 72,663.86 5,443.38 141,218.93 3,648.80 3,883.23 5,429.36 6,499.98 5,350.64 3,800.55 3,048.56 3,685.32 3,491.17 4,945.88 4,173.36 4,010.75 3,386.52
Projected Monthly Sales
TOTAL
67,761.69
77,313.86
5,844.45
150,920.00
IS535 9 Introducing Point of Sales
