A touchscreen till POS machine

Explaining How the Point of Sale Industry Works

If you are researching point of sale solutions for your business, or you’re simply keen to get a better understanding in terms of regarding the POS industry, we’ve put together a brief summary of how the point of sale industry works.

As a rule, the POS industry operates via a supply chain model like this:

Explaining hardware manufacturers and software developers

Point of sale manufacturers create hardware, such as:

  • All-in-one POS terminals
  • Bar code scanners
  • Keyboards
  • Cash drawers
  • Pole displays
  • Receipt printers

POS software developers, such as CES Software, focus on creating software that delivers POS functionality. These include the following:

  • Sales transactions
  • Inventory control
  • Reporting capabilities
  • Managing customer data

It’s common for developers to customise their POS software for different industries, such as retail, salons, and convenience stores since these business sectors can have very diverse requirements. Some software developers may offer to choose to work directly with businesses as an effective way of creating cost-effective and customised solutions.

Additionally, some developers focus their attention on providing online POS solutions based on cloud technology, for the point of sale software to be used more independently of hardware restrictions, and accessed from a POS station, computer, laptop, or smartphone.


POS distributors play a role in the chain by acting as liaisons between manufacturers and Value-Added Resellers (VARs), who we will explain more about further on.

In the industry, the large distributors will be set up to source and work with the best manufacturers of POS hardware, preferably those offering innovative and cost-effective technology. By working with manufacturers, the distributors help to reduce costs and improve products with product testing and product support.

The POS distributors can also assist in integrating POS hardware with various POS software options. This then means VARs can offer reasonable options for businesses of all levels. Distributors will often offer the convenience of terminal setup as standard so that VARs can provide ‘plug and play’ installation for their clients.

The distributor’s relationships with POS software developers deliver the additional benefit of customer leads for POS VARs. Furthermore, the benefits that distributors offer to resellers can also extend to training for products, sales support and advertising assistance, technology and business, and networking. Technical support, testing software compatibility with POS terminals, for example, is most likely to be offered as part of the relationship.

Value-Added Resellers

POS VARs are the specialists working directly with business owners to find the right balance of hardware and software for their business. They’re also the go-to when it comes to helping businesses adding value to the products with their expertise and ongoing support. VARs may work independently or with a POS Distributor for added support and expertise. VARs will handle installations, coordinating or supervising cable and electrical installations. They will also provide on-site training for the staff.  Many VARs bring decades of POS experience with equipment of all shapes and sizes to bear for the benefit of the store owner.

POS End-Users

The end-users of POS systems are businesses large and small in retail, service and other industries. Businesses using point of sale solutions range from small single-store outfits to online companies, to national or international corporations.  Point of sale solutions can hold tremendous benefits for apparel or hospitality applications, automotive shops, drug stores, restaurants, grocery stores, e-commerce sites, a single store or multi-store operations, and more.  An appropriately suited POS system can save time and money, greatly increase efficiency and improve customer service and satisfaction.

The effective installation of a point of sale system involves a ten billion dollar plus industry with numerous players adding value at every stage. End-users of a POS system, and certainly their customers, may not see or appreciate the tens of thousands of people involved, but they are there, in the background, helping to make it happen. The local reseller may be a two person or fifty-two-person operation, but they are ultimately backed by companies from modestly sized software developers to multi-billion dollar distributors and layers of expert industry personnel, all working to ensure a smooth and seamless POS installation.