The Frugal Yankee - Comments

Save on Capital Purchases

Paul Lysgard — Wed, 23 Dec 2009 18:24:00 -0500

So here we are at the pinnacle of the holiday season and all of the retailers and restaurants are hoping for a nice outcome once the dust settles on the buying season. In the upcoming weeks, they'll try to quantify that outcome as either in the black or in the red. Based on this outcome, they'll then start thinking about the upcoming year and future years.

The retail and restaurant chains, whether they're Sears, JC Penney, McDonalds, or Dominos Pizza, will also begin a yearly tradition - looking to replace existing point-of-sale systems or peripherals. Typically, large chains will replace 3-year old systems with completely new systems. But, in a financial crunch, some might decide to simply replace defective machines with new ones and stick with those machines that are still functioning fairly well.

Capital purchases come with a 3-year depreciation for tax purposes and this is one of the reasons that companies will replace their machines. They sell off their existing equipment and replace it with three years of tax write-offs. Many times, these companies will purchase equipment from software vendors who wrote and maintain the software that operates their companies. But, is this a good thing?

Many software providers who also sell point-of-sale equipment will invariably put together a "package price" for everything. They might also provide tech support for the equipment. But, that's not necessarily always the case. And, there is one thing that many of these software companies do that doesn't save the buying companies money - they overcharge heavily for the equipment.

One national restaurant chain was replacing just their Epson TM-T88 thermal receipt printers. The CEO didn't want to rock the boat by using a different vendor for the printers, but all of the rest of senior management wanted a change. The software company not only did not support the equipment, but when calls came in about problems, their reps were rude and one even said, "Stop calling us about these problems!" Still, when it came time for the purchase, the software vendor told them their price, $425.00 each, and told them that if they didn't purchase from them, they wouldn't support the equipment.

The Epson printer is "plug-n-play", no tweaking necessary. Another hardware vendor who was offering the same printer (exactly the same Epson part number) was selling them for $287.95 each. The restaurant chain has roughly 1,600 restaurants nationwide. It's also a full-service restaurant and typically has 12 receipt printers (average) per store. Are you beginning to see the math here?

The restaurant chain replaced roughly 19,200 printers. They spent $147 more per printer than they needed to and the grand total to the software vendor: $2,630,400.00. I think, when you're watching your wallet (or pocketbook), you'll notice a difference either good or bad with a number like $2,630,400.

The current CEO of the restaurant chain didn't want to rock the boat because the prior CEO had made a mistake of some sort that cost the company roughly $1 million. What should they do with this CEO?

What's the point, though? There are many software companies that "provide a full solution". And, a majority of these are highly overcharging for simple things like receipt printers or credit card readers. Actually, they're overcharging for entire point-of-sale systems and all peripherals.

What's a better option? Find the equipment at the lowest price possible. Purchase the equipment. Purchase the manufacturer's extended warranty for the equipment. Such large equipment purchases always get the attention of the manufacturers and distributors. They'll get involved to make the transaction work smoothly. They'll provide support. Then contact a software company that provides software and support for software only. Make them itemize. Don't let them force you to purchase equipment through them at their highly inflated prices because they can't force you. They add nothing to an Epson receipt printer or a Mag-Tek card reader.

Make note of the part numbers of the point-of-sale systems and peripherals. Two very popular Epson receipt printers are the Epson TM-T88IV, part number C31C636084 (standard direct thermal receipt printer with a serial interface) and the Epson TM-U220B, part number C31C514653 (standard dot matrix receipt printer with a serial interface). After a lengthy search, I found the following prices at the following companies:

POS Paradise (www.posparadise.com) C31C636084 $277.95 C31C514653 $221.95
POS Global (www.posglobal.com) C31C636084 $280.25 C31C514653 $225.84
Gemini Computers (www.geminicomputersinc.com) C31C636084 $282.35 C31C514653 $231.77
Total Barcode (www.totalbarcode.com) C31C636084 $280.47 C31C514653 $230.47
Barcode Giant (www.barcodegiant.com) C31C636084 $287.40 C31C514653 $232.40

This is a fairly small sampling, but I couldn't find these products at lower prices than these. Most of the TM-T88IV printers by the other resellers were priced in the low to high $300's and, similarly, most of the TM-U220B printers on the rest of the sites I visited were priced in the $250's to over $300. I couldn't find POS Paradise on the Bizrate or Nextag comparison shopping sites, so I imagine that their overhead is a little lower, hence their lower prices on these two printers. But, they're all very low compared with the rest and certainly much lower than the price that one software vendor was selling them for.

If your company is so big that you can spend millions of dollars for receipt printers, you're also probably large enough that you can afford to spend $25,000 per year to hire someone to find the best deals on hardware. It's not rocket science, after all, it's just a printer. Or a card reader. Or a cash drawer. Even complete systems are available for much less cost than what the "full service" provider will sell them for.

This same restaurant chain then decided to replace the point-of-sale computer systems. Their special "bundle price"? $6,750 per system. Again, times 19,200. Another vendor could sell them for slightly under $3,000. Is this starting to sound a bit redundant?

For the smaller retail and restaurant chains, money is always a concern, especially lately. There are many point-of-sale software manufacturers that will customize software for your company and make it function for you. Without the special "bundle price" that includes hardware. And, the price for customization and support is much lower than when they put together a package that includes hardware. They might recommend hardware, but companies probably shouldn't purchase hardware from software companies. They can (and will) describe all of the difficulties in customizing the software package to suit your particular needs (which, of course, will drive up the total cost).

Find the software manufacturer, have them customize and provide support for your software, and leave them out of the hardware aspect. There are many companies now that provide point-of-sale solutions and are eager for your business. They do a great job with customization.

But, remember, an Epson printer is an Epson printer, nothing more, nothing less. When you plug it into your point-of-sale computer, it works. There's no special customization needed to make an Epson receipt printer print a receipt. So, don't be fooled. Do your homework and most importantly, save money, big money, by doing so. Retailers and restaurant chains, especially hard hit during these recent difficult times need to make better choices and this is one way they can still have what they need - software systems that function, a software company providing support, and equipment that functions - without all the frills and exceedingly higher costs. Remember, if you can save money, you can offer discounts to attract more customers and, in the long range, earn more money.

Be smart and save money!

Light bulb jokes

Garen Daly — Sat, 12 Dec 2009 06:17:24 -0500

Thanks for the worthy additions.

More light bulb jokes

Spencer — Sat, 12 Dec 2009 02:28:19 -0500

Sorry for being late to this - two more for your list;

How many roadies does it take to change a light bulb?
There's nothing wrong with the light bulb, it's the way you're using it.

How many cockroaches does it take to change a light bulb?
Nobody knows - when the light comes back on they all scatter.

(I think that last one was from a Pixar movie)

There's a few more here and here.

Thanks for the kind words.

Garen Daly — Wed, 25 Nov 2009 05:15:37 -0500

Thanks for the kind words. We appreciate it.

Your webpage

anita — Mon, 23 Nov 2009 06:54:56 -0500

Hello,
I am not a New Englander. I live in New York and discovered your web page yesterday and just love it!!!!!!I look forward to going to it everyday.

These are awesome tips and

jimmahon — Tue, 10 Nov 2009 04:55:00 -0500

These are awesome tips and so true,

I hope that these companies have some kind of recycle program in use for worn items just to make this perfect.

It’s how the world should work!

thanks

sncr_1 — Tue, 08 Sep 2009 22:46:00 -0400

thank you very much !

Thank you!

DevonD — Wed, 02 Sep 2009 05:32:00 -0400

Job well done! Thank you for this! Anyway, the business sector was no doubt affected by the economic crisis that hits the nation. Many business companies had to proclaim its bankruptcy and ask the help of the government before the end of the year. Well, People of Wal Mart, may be a vicious stereotype – but admit it: there is a kernel of truth to the idea that there are people who frequent the store that seem like perhaps they shouldn't contribute to the gene pool. Some people of Wal Mart, or at least people who habitually shop there, are just cost conscious consumers, people who need things or are able to afford something they normally wouldn't from a high end shop but can there – Wal Mart is a friend to the college student – but the stereotype at times comes all too true at the stores.

Baseball has been one of the

BradA — Wed, 29 Jul 2009 01:58:00 -0400

Baseball has been one of the favorite sports of Americans and Yankee is my favorite team then. But baseball is again controversial because of Pete Rose. Peter Edward "Pete" Rose, Sr. (born April 14, 1941 in Cincinnati, Ohio), nicknamed Charlie Hustle, is a former player and manager in Major League Baseball. Rose played from 1963 to 1986, best known for his many years with the Cincinnati Reds. Rose, a switch hitter, is the all-time Major League leader. But his life turned upside down after the 1989 gambling accusation on baseball games. Pete Rose is under consideration to be reinstated to Major League Baseball. Pete Rose was busted for gambling on games, though he never bet against his team, and agreed to completely withdraw from baseball voluntarily, reaching an agreement to do so with then MLB Commissioner Bart Giamatti. Incumbent Commissioner Bud Selig has reportedly been seriously considering reinstating Rose so that he may be submitted for enshrinement in the Hall of Fame. None other deserves it as much – Rose held a batting average of .300 every year he played, and is one of the only two members of the 4,000 hits club. (The other is Ty Cobb.)

Vacation rentals with real added value

Red Hare — Mon, 13 Jul 2009 10:59:23 -0400

Ms. Sacco -

I believe you will find the website http://www.GetMoreVacations.com compelling in the extreme. This website directs traveling families to vacation rental properties that provide them with free golf, deep sea fishing trips, white water rafting, horseback riding, wildlife tours, museums, amusements, water parks and much more every day of their stay. Getting to do the things you actually WANT to do for free on vacation is real value and that' what people need and want this summer. Frugality never came with such rewards!

Have a great summer!

Vacationing Happily

reply

medea — Fri, 26 Jun 2009 04:56:00 -0400

Follow a diet plan that gives you a diet the right amount of calories to lose weight safely and to optimize your body composition - losing more fat and less muscle. This is key to maintaining a desirable body weight once you get there. Your weight loss calories are determined based upon your age, physical activity, sex, height, current weight, and special needs.

What baseball needs to do is

Adams — Thu, 25 Jun 2009 12:17:00 -0400

What baseball needs to do is keep its players from buying steroids and using them anyone caught should be arrested and any game they played in forfeited.

Happy Holiday!

oldtimerock — Tue, 16 Jun 2009 11:38:00 -0400

Wishing everyone a Happy Easter!

It sounds effective

jansen — Thu, 11 Jun 2009 02:02:00 -0400

This smart weight loss sounds effective however, loosing weight needs a lot of effort and hard work.I myself have my own weight plan like jogging everyday, spending time in the gym, strict diet and controlling myself to eat a lot.

Thanks

Garen Daly — Sun, 24 May 2009 17:31:59 -0400

Wendy, Thanks for stopping by and thanks for the comment. Much appreciated.