As prices continue to skyrocket for medical, fuel and food, so do the end costs and risks of making a consignment or resale business dependent upon the Internet and 'cloud-based software'.
An allure of cloud-based software is a "low payment to start' but installment payments are generally available for any software program. Just ask and be wary of vendors offering software 'leases' because that is no different from endless monthly payments for web-based software. Case in point: Wilson at 'consignpro' criticizes vendors' 'forever fees' then offers a monthly lease 'payable for as long as you use the software'. What's the difference? None.
By any measure the 'initial cost' of any software program is the total paid in the first 12 months (not just the first month) for the program. The start-up cost for a cloud program at $100 per month is $1,200 and that's just the beginning.
There are several forms of added costs after getting locked in and well past the money-back period:
- The basic inherent risk is the threat of price increases. The monthly payment may be $100 today but what will it be later on? It's difficult to any website alerting to this risk. Ask.
- Another escalating cost is number of users. That up-front appeal of 'only $xx per month' quickly disappears when more users of the software are added.
- Expanding to additional locations often is not on the minds of entrepreneurs starting a small business but 'what if' you succeed beyond your hopes and wish to open additional locations? At least one provider of cloud-based charges double so at a minimum the cost of software for 2 locations is $200 per month. That's exactly what software vendors are hoping for - big money from small business.
- Locked in? Yes: After investing money and the time it takes to learn a software program, most store owners and employees will resist switching to another program.
Risk: Business Dependency
The secure way of operating a business is to purchase software that is owned by the business, installs on business computers and is not dependent upon the Internet and someone else's computers.
Web-based software is not owned. It is rented. This is diabolically opposed to paying once for a program that is owned by the business.
Cloud software is not installed on business computers. It resides on a computer that often shop owners know nothing about. Where is it? Who controls it? How dependable is it? What security measures are in place? Of course those pushing cloud software will offer (hollow) assurances or reliability but they won't make guarantees backed by real assets. So if it all blows up and you lose everything, what are you going to do? Sue?
Risk: Customer Information
Putting clients' personal information out there 'in the cloud' means taking responsibility in a situation over which you have absolutely no control. Shop owners know next to nothing about the person or persons providing 'the software' and the computer it is installed on. Maybe shop owners who rely upon cloud-based take the same tact as software vendors: 'If something goes sideways, what will my clients do about it? Sue me?
Maybe everyone involved in 'the cloud' are just hoping for the best and hoping for a pass if it rains.
There are absolutely no forewarnings by purveyors of cloud-based software of risks. On the contrary there are only empty assurances that all will be well.
For that matter it doesn't appear that shop owners who opt for Internet software give any heads up to their customers, alerting them to the fact that their personal information will be dangled on a hackable server out there somewhere.
Imagine store owners disclosing (as they should) in writing to every customer: "Be aware that we will be running our business on a computer that we know nothing about, using software provided by a complete stranger and placing your personal information on that platform."
The sheer cost of cloud-based software, the risks and the uncertainties overwhelming deter most shop owners. The safe and secure option is to buy a software program like No-Fee Consignment Software. pay once. Install it on a computer under shop control and keep shop and client information securely guarded.
Alternative to Cloud-Based Software
Complete Point-of-Sale (POS), Inventory and customer management systems for small businesses in consignment, resale, retail, antiques, thrift and mall floor-space rental. Solutions for every budget. Free software updates. No shipping charges or sales tax (except TX).
Our software and hardware systems are tiered in features and price so small businesses just starting out can computerize affordably and upgrade as profits and computer skills grow.
A basic system of software, a cash drawer, receipt printer and barcode scanner is $879, final price, delivered in 2 days with not shipping charges or sales tax tacked on (except TX 8.25%).
Computers are available from Dell - solid equipment and with 'next-business-day' service at your store, so if there is a computer issue, the technician comes to you and there's no waiting.
The software manages a variety of transactions at different price points:
- Retail is the buying of merchandise from companies as opposed to individuals (suppliers, wholesalers, importers, craftsmen, etc.) and the reselling of purchased items. Cost basis can be recorded and profit/loss reports can be generated.
- Resale is the purchasing of (usually used) merchandise from individuals. Across the country it is becoming a requirement of 'secondhand dealers' to record identifying information about the sellers and the items they sell. Some jurisdictions even require reporting purchases to local police.
- Consignment of course is taking in items that belong to others and reselling for a share of the sale proceeds. So far every conceivable variable has been included in the software including different consignor %s, configurable categories and specific reports.
- Thrift for the most part is selling items that have been donated. The cost basis of such items is zero so total sales equals gross income.
- Antiques - Antiques sales and floor-space rental are included in the Diamond edition of No-Fee Consignment Software. Mall operators can sell vendors' wares at POS stations, share (or not) in the sales proceeds and deduct rent from sales.
- Layaways are a great way to increase sales by making more purchases possible. The program permits a schedule of payments, tracks the payments and finalizes the sale with the last payment.
- Credit-Card Processing is simple and straightforward. Use any processing service including Square. The program is not integrated with a service that must be used (unlike competing programs).
- Cloud Features allow your clients to view their information and add inventory online (that can be downloaded and edited at the shop. They can view their accounts on cell phones and PCs.
- Work From Home does not require a web-based program costing $100 per month every month! Use free online services to access the shop computer and work on it just as though you were sitting there in front of it.