Why Integrate Magento with a Point of Sale (POS) System?

By December 8, 2010Magento

Recently as I have been rolling out more advanced versions of the Runway Magento Extension, I have noticed that more and more merchants approach me and ask the same question essentially: Why Integrate Magento with a POS? Here is a quick review of the advantages and disadvantages from the merchant’s standpoint of integrating to a POS:

Why Integrate Magento to a POS

Advantages of Running a Magento integrated with a POS:

  1. Never sell what you don’t have in stock. This is perhaps one of the biggest issues that this type of integration achieves. Once implemented, you will never end up overselling products and find yourself in a need to call your customers and apologize. In some worse cases you may find yourself dealing with refunding these orders and even trying to undo the whole packaging and shipping process, depending on how automated is your store.
  2. Understand the bigger picture of your entire catalog. Once you are connected to a robust POS like RunIt and start accumulating data, you will gain knowledge that until now was based only on gut feeling. You will be able to understand your inventory patterns, like which type of products sell fast/slow in what time of the year. Or you will be able to better anticipate a hot item’s arrival and how fast you will expect it to become out of stock – this will enable you to order just the right quantities to perhaps not run out of it and at the same time, not leave you with a pile of unsold product in your storage.
  3. Share inventory online with your brick and mortar store(s), especially if you have more than one location. This is a bit difficult to explain but easily understood by merchants that reach this size. If you have multiple locations you are probably using some sort of a POS. Well, now you want to sell your catalog online and you want ALL your catalog to be online and you want to share your inventory from all your locations (why not?). Well, if this is not automated, this becomes an enormous task to overcome manually so I have seen merchants putting aside inventory just for the web, or sharing only one store’s inventory, etc. If you integrate your Magento website with a robust POS like RunIt, this entire process is fully automated for you.

Disadvantages of Running a Magento integrated with a POS:

  1. You cannot sell what you don’t have in stock. How can this be a disadvantage? well, some online stores offer products for sale that they do not have in stock and buy the products after the online order was placed. In theory you can still integrate with a POS but it is not designed for this and you are better off not integrating at all in order for you to not lose sales.
  2. Additional layer of complexity. One of the things that are easily forgotten when evaluating all of this aspect of a business is complexity. Please do remember that any additional system that you add will increase complexity and overall cost of ownership for the business. This means that you will have to train some people, very likely the webmaster or web marketing person inside your shop.
  3. Dealing with Two Catalogs of Products that are Meshed as One. This is essentially the main ingredient in the integration, and we actually pride ourselves of doing a great job of handling 95% of the data integration seamlessly behind the scenes. The reality is that when you integrate Magento with a POS you have two product catalogs: one for the POS and one for Magento. Integrate them correctly and they map one to the other pretty nicely. However, there will always be some items of the catalog that cannot be fully integrated as both systems are simply not built for the same purpose. For example, in Magento you will find much richer image management options for each product while in the POS you can only upload one image and that is it. Also in Magento you have full WYSIWYG control on how to present the product long description which is not handled as nice in the POS as it is certainly not targeting HTML browsers out of the box.

Overall know that smaller merchants are less likely to benefit from a POS integration while larger shops and small chains of stores will definitely benefit from having their Magento website integrated with their POS system. The bottom line is if you want to grow your business, and now is the right time to grow your online web store(!), you will need to integrate your online store with some sort of a POS.

Let me know if you think I may have missed some advantages or disadvantages…