The Big Squeeze on Your Bottom Line

It is the nature of the game. But it can be a good game that can serve multiple purposes.

You get to offer your clients state-of-the-art equipment that meets the needs of their businesses and their clientele, you get to create packages that save clients money, and you get to make a nice profit for your services.

Unfortunately, that profit has been dwindling over the last several years for resellers of POS products especially since your clients are owners and managers of restaurants, where profit margins are already slim.

In all likelihood, those profits could be larger, for both you and the clients you serve. Your bottom line should not be shrinking. But, what can you do about it?

It may simply be a matter of working with a partner who offers total transparency.

And the best part? You don’t even have to change anything you are doing now regarding your labor output on a daily, weekly, monthly, or annual basis.

Residual Revenue Compression

While residual revenue is the money that flows to you after your initial expenditure or investment, residual revenue compression is the slowdown of that flow of money.

In an ideal dealer or reseller scenario, you invest in equipment that will meet your clients' needs, and then you sell it a la carte or as part of a larger package stuffed with benefits and guarantees.

Then, as you sell the equipment or those packages, your revenue begins flowing in.

With residual revenue compression, the original manufacturer that sold you their products for resale hits you with multiple fees, many of them hidden, so you don’t even realize you are losing money unnecessarily.

Normal fees might include dues, assessments, and interchange fees, but even those fees can be manipulated.

Add to that the fact that you are then also charged things like risk transaction fees, processing transaction risk fees, and PCI compliance fees.

Some of these costs are legitimate and must be passed on to the dealer and reseller, but some are not. Many of the even legitimate fees are inflated to increase manufacturer revenue.

Why?

Most manufacturers are publicly traded companies with shareholders demanding more revenue.

The primary goal of a publicly traded company is to make more money for its shareholders, and often they will do that any way they can. This often means inflating the costs and fees you pay, which cuts into your bottom line.

Check Your Reseller or Processing Agreement and Your Statement

How do you think you could fix this situation?

If you have been feeling the belt's tightening and think it might be due to processor cost manipulation, take a look at your agreement or your statement of fees and costs.

• Do the prices seem overinflated?
• Are their hidden fees that make no sense?
• Does your contract or agreement seem transparent or opaque?

These are all factors to begin taking into consideration.

Work with a POS Partner You Trust

When you are ready, you can contact a partner you trust to compare costs and fees.

It would be beneficial to get another eye on your figures, someone who can tell you what is hidden, and where you could be saving.

The first thing to look for in a new partner is whether they are a privately owned company, accountable to clients, not just shareholders. There is a major difference between the way these two different companies operate.

Then look for transparency. Is everything clear and easy to explain up front?

Contact Total Touch to Reduce Residual Compression

If you’re a POS reseller or VAR experiencing residual compression, contact our team at Total Touch today if you’re ready to discuss how to reduce residual revenue compression and improve your earnings.

Total Touch POS and Electronic Merchant Systems can show you how to earn more money and grow your POS Reseller business.

Total Touch works closely with dealers and resellers, restaurant managers, and owners, to show you line by line where you are losing money and how to increase earnings by dealing directly with a partner dedicated specifically to serving you. Get a free, confidential credit card rate quote for your clients from Total Touch.

We believe you deserve transparency and are committed to your success!

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About Total Touch POS®

Total Touch POS is the complete restaurant management solution designed by restaurant owners for bar and restaurant owners' distinct management and operational needs. Total Touch is the only modern hybrid POS that can help VARs grow your business while equipping owners and managers to manage staff, reduce costs, and increase profitability when staff shortages and rising prices make hospitality operations challenging.