Some may argue this, but the purpose of a business is to be profitable. Based on a recent survey of retail solutions providers, most POS dealers aren't very profitable, if at all. Surprise! While lack of profitability might be the unfortunate common reality of most in the retail channel, ways of becoming more profitable are lesser known -- or at least, enacted upon. Brett Harward, speaker, consultant, and author, presented at RSPA RetailNOW on Sunday afternoon and educated those in attendance on ways to make their business more profitable.
According to Harward, the results of the survey showed that there are some very significant differences between the average dealer and the most profitable. The greatest difference is that the leaders enjoy a much higher volume of recurring revenue, including SaaS, hardware maintenance contracts, supplies, and credit card processing.
This last category is what really separates typical dealers from leaders. Indeed, the survey showed that leaders earn 110% more recurring credit card revenue than the average dealer. Understand that when we say "average dealer," we're talking about 90%+ of dealers.
I cringe when I think about most dealers not focusing significant energy on credit card processing. For years now, we've made sure every issue of Business Solutions has coverage of payment processing with an emphasis on how lucrative this can be. Later in the evening, I spoke with Matt Taylor, CEO of Mercury, who shared with me that many dealers still don't understand how much money can be made.
So, how does your payment processing revenue compare to the leaders? Calculate what percentage of your total revenue comes from card processing. If it's less than 15%, you're not a leader and you're missing out on one of the greatest revenue sources available to dealers today.