One retail technology aspect we are often asked about is the benefit of a dealer management system (DMS) over a point-of-sale (POS) system. This question has no clear-cut answer; rather, any benefit depends on several factors, including the current and future individual dealership’s needs.
The phrase “point-of-sale system” sometimes refers to the hardware and/or software portion of the package. For this article, I will focus on the software.
A point-of-sale system typically replaces a cash register in a retail establishment. POS systems can track inventory and record transactions such as purchases and returns. Many POS systems offer basic to moderate inventory management tools such as computer-assisted ordering utilities—powered by reorder points (minimums and maximums)—and basic report generation.
Some POS packages also provide time and attendance programming. A few popular (and effective) brands include QuickBooks POS, QuickStore by Wasp, Microsoft Retail Management and The General Store.
Dealer management systems (DMS) are more comprehensive in design and reach than POS systems. In fact, a DMS essentially includes POS system functionality and modules for managing back-end accounting, unit sales, finance and insurance, service, warranty, rental and storage and parts.
By linking processes in different modules, a DMS organizes business functions and houses all data in one place. Centralizing data enables various operational areas to view and share customer information. The result is more efficient operations, improved management information and fewer errors. Well-known DMS options catering to the RV aftermarket include Topline Software, Integrated Dealer Systems (aka IDS), Motility, DealerVu, Lightspeed by CDK and DealerLogic.
If you are in the market for a new system to manage your dealership, I strongly encourage you to speak with representatives from the various firms. Ask for references from current customers or schedule a software demonstration. You may even be able to access an online trial store setup to test-drive the software before you purchase.
These products offer many similar features but can vary greatly in look and ease of use.
When shopping, ask pointed questions about technical support—hours of availability, response rate, upfront costs and hidden fees. Think about the processes important to you in managing your parts and service operation. Do you want to implement a cycle counting program? Do you want to establish bin locations and be able to easily update this information? Ask whether the software supports these tasks and how easy (or cumbersome) the process is to manage.
Buying a DMS or POS can be a major dealership decision, and you will usually be living with the product for years to come. Research on the front end can minimize what we marketers call post-purchase dissonance on the back end. Again, I believe the POS vs. DMS choice is best made on a case-by-case basis. Currently, vast options are on the market, ranging in price from $500 to $100,000. The broad range makes the retail technology goal reachable for all.
Side note: Topline Software, which was bought by NTP-Stag’s parent company, Keystone Automotive, five years ago is a particularly fine software choice. The software is easy to navigate and offers a parts-only module and a parts, service and sales version. Both types are available at affordable price points. Topline’s standard monthly fee provides 10 seats or licenses and a label printing utility. I recommend you check Topline out.
In closing, we all know operating a retail enterprise can be challenging. Tasks such as product ordering, receiving, cycle counting, tag/ticket printing and product organization seem simple in concept but can be cumbersome to execute. In 2022 and beyond, automation is high on the retailing best practices list.
Yes, the time for dealerships, service centers, campgrounds and mobile RV repair firms to mechanize daily inventory management tasks is now. The average annual inventory shrinkage (loss) at retail is 2% of sales. The number is much higher for many stores. Consider the profitability improvement your store can realize by decreasing inventory shrinkage. Also, bear in mind that wages and labor demands are drastically increasing.
Regardless which system type you choose, acquiring and using this and other retail technology tools can improve your business operations. The future labor savings, enhanced customer service and reduction in inventory shrinkage realized by using POS/DMS technology make it an essential and worthwhile addition to your business.
Val Byrd is NTP-Stag’s customer merchandising manager. She has worked in the RV aftermarket for the past 20 years and is a leading RV retail expert on store layout/design and aftermarket product display. Previously, she worked in the grocery industry as a retail manager, buyer and promotions manager.