Integrated Payments Drive Rapid Growth For POS Reseller
By Matt Pillar, editor-in-chief, Integrated Solutions For Retailers
Just four years in business, All Florida POS has enjoyed perennial 30 percent growth. This year, integrated payment processing and mobile POS will help double sales..
It’s a recurring theme among modern POS resellers: Combine an open mind, a solid IT background, and a few industry connections, and voilà, a POS VAR is born. In our May 2013 feature story we introduced you to Chris Pace, a healthcare business analyst who launched Phoenix-based Congruity Solutions after helping a friend set up a mobile POS in his coffee shop. You also met Lisa Falzone, the IT entrepreneur and subject of our September 2013 feature, whose “accidental” entry into the mobile POS resale market in 2010 has yielded an install base of more than 6,500 merchants to date. And now, we meet Edwin Leonardo, president and CEO of All Florida POS, another circumstantial start-up from the class of 2010. It was early that year when Leonardo, a networking professional with a solid gig at the Department of Defense, was tapped on the shoulder for a bit of help. His friend was opening a restaurant, and the POS reseller tasked with installing its new Aldelo POS system needed some assistance with network configuration. Leonardo stepped in, and so impressed was the reseller that he offered Leonardo a commissioned position. “I shadowed him, learned the software, and helped him bring in a substantial amount of new business within the first few months,” says Leonardo. Later that year, the reseller moved to a different POS platform. Leonardo saw an opportunity to inherit a territory, to run his own business, and to become a full-time Aldelo reseller. With the support of Aldelo and Sterling Payments, he jumped on it.
New Builds, Hot Market Drive Growth
While the transition from government employee to business owner was somewhat turnkey, thanks to the seeds planted in his part-time engagement, Leonardo still had some bootstrapping to do. He had a territory, a distributor network, and a complete product set. Now he needed customers. “Fortunately, south Florida is an overpopulated, very touristy place,” he admits. “There are restaurants everywhere, even in apartment buildings. When one closes, 10 more open. Maybe it’s the sun, the water, or something in the air, but people are happy to spend money here,” he says. Leonardo’s intuition is backed by fact: At 3.5 percent, south Florida’s economic growth outpaces the national metropolitan average by more than a point. Real estate and hospitality are two leading drivers of that growth, combining for nearly a 40 percent share of the area’s GDP. Retail and hospitality are also the region’s leading contributors to job growth, lending to a five-yearlow 6.7 percent unemployment rate, nearly two full points lower than the national average. Expansion in these sectors offers Leonardo an opportunity that plays right into his business plan. When that one restaurant closes and 10 more open, it’s likely that all 10 of the new establishments have received an All Florida POS calling card.
“When you can pitch integrated and feature-rich POS and payment processing solutions to a new restaurateur, it’s a consultative sell from the start,” says Leonardo. “When we get in on the ground floor of a new opportunity, we’re set up for the potential to grow with the business, which is a sustainable plan for selling more.” In fact, getting in the door with local start-up franchisees has netted All Florida POS nationwide business. One such customer, a locally based operator for a global hospitality chain, is planning an additional 200 U.S. locations and bringing All Florida POS with it, contributing significantly to Leonardo’s robust 2014 growth projections.
With that said, large multisite chains are the exception to the bread-and-butter rule at Leonardo’s company. “Big restaurants come and go, but the little places are always consistently thriving in this market,” he says. Given southern Florida’s incredibly multicultural demographics, many of those small hospitality businesses cater to specific ethnicities, another characteristic of the market Leonardo plays to his advantage. In fact, in several of the counties served by All Florida POS, international migration — primarily from Latin American countries — is the leading source of population growth. “The cultural diversity of our portfolio is complex,” he says. “From corner Cuban coffee shops to Thai restaurants, when someone asks me if we’ve worked with a specific type of restaurant, I can show them a comprehensive list of referrals. Those references make it easier to walk into deals.” It’s also beneficial that the software he sells is multilingual. Leonardo’s ethnically oriented sales strategy is reminiscent of that taken by Andy Lau, president of NYC-based VAR MoleQ and subject of our February 2013 feature story.
The Market Is Hot, And So Is The Technology
Regardless of the market’s appetite, to run a sustainable business a new POS VAR has to offer the right technology. For All Florida POS, integrated payment processing is a key component of that offering. In fact, Leonardo attributes a healthy 30 percent of his company’s revenue to payment solutions. “Most of this is recurring revenue generated through new POS installations, where it’s not difficult to sell an Aldelo solution integrated with Sterling’s competitive rates and service levels,” he says. Even in those situations, bank processors offer stiff competition as they canvass the fastgrowing area for the same new business opportunities sought by All Florida POS. When that competition presents itself, Leonardo pitches Sterling’s willingness to meet or beat competitive pricing and, more importantly, the value of integration. “Business owners are receptive to the idea that, if a problem arises, an integrated solution means they don’t have to get on the phone with four different companies to solve it,” he says. “We can typically resolve any issue on a single phone call.”
All Florida POS also boasts a fair number of conversion accounts, where the company has replaced an existing payment processor with Sterling. “It’s a more difficult sell because many payment processors enforce cancellation fees in an attempt to hold merchants hostage. Small businesses are resistant to the change because of it, but we’ve found success pitching Sterling’s value, supported by their willingness to cover a percentage of the cancellation fee to encourage the switch,” he says.
“We sell iPad POS as-a-Service and earn monthly residuals on the sale, which equates to better margins in the long term.”
Edwin Leonardo, president and CEO, All Florida POS
The plumbing of integrated POS and payment processing aside, Leonardo says he’s most excited about the potential of cloud-enabled mobile POS. “We have a long list of clients queued up for iPad-based POS, and the Aldelo cloud that supports it is amazing,” he says. “We had the honor of onboarding 20 accounts in beta, and the ability to demonstrate the future of mobile POS to our customers has been great from a scalability standpoint. When you show customers what their future looks like and they get excited about it, they have a tendency to stick with you.” That client excitement stems from the customer experience enabled by mobility and, equally important, from the real-time, anywhere access to data provided by the cloud. “When I use my iPad to demonstrate realtime reporting that gives business owners and managers access to their sales data, projections, trends, and analytics, in the palms of their hands and whenever they want it, the solution goes a long way toward selling itself,” says Leonardo. And despite the lack of the hefty, up-front hardware margins that accompanied the POS of yesterday, he says he’s eager to sell iPad POS. “We sell iPad POS as-a-Service and earn monthly residuals on the sale, which equates to better margins in the long term.”
Despite his excitement for the prospects of mobile POS, Leonardo is careful not to paint customers into a corner. If traditional, fixed POS stations are the best solution for the business, All Florida POS won’t sell technology for technology’s sake. “As long as we do our part to help the merchant stay operational using modern technology, and show them the value of local service and fair pricing, we’re sure to make it a profitable endeavor,” he says.