Many people are not ignorant of the challenges that come with running a retail shop. Managing inventory, paying rent, and handling customer demand is quite demanding, especially in Nigeria today. However, there’s a growing trend toward POS agents earning more than some small businesses. It might sound surprising, but a closer look at the realities of both businesses shows why POS agents often have the edge.

The recent interview with a few POS agents and small retailers revealed that POS agents have several benefits that not only make their work slightly less stressful but also more financially beneficial. On the other hand, small retailers incur high operating expenses and seasonal sales, POS agents can enjoy consistent daily revenue and low operating expenses. In this post, we’ll explore why POS agents are thriving and how they’re able to earn more than some small-scale retailers.

1. Daily Cash Flow: Every Day Is Sales Day for POS Agents

For small-scale retailers, sales are not frequent. Some days are busier than others, and there’s always the risk of having slow days. POS agents, on the other hand, enjoy steady daily cash flow. POS agents can earn money by processing cash withdrawals, bill payments, or selling airtime. Their daily cash flow will not require them to wait months to recover their inventory costs, unlike small businesses that use inventory to generate profits.

2. Immediate Earnings and Fast Turnover

A small-scale retailer does not generate earnings immediately, unlike POS agents. While a retail store owner might have to wait for weeks or months to make a profit from their goods, POS agents earn money on every transaction. Withdrawal charges, bill payment, or airtime sales allow POS agents to see immediate returns from the services they provide.

3. Low Overhead Costs

Small scale retailers spend a lot running their businesses. They have to pay shop rent, electricity bills, inventory management, staff wages, and generator fuel and maintenance. These costs are just a few examples of expenses small-scale retailers face. POS agents, however, operate with minimal overhead costs. They typically need only a kiosk or a small space and a POS terminal to get started. If they operate from home or have a mobile setup, their costs are even lower. They don’t have to worry about the high rents and operational expenses that small businesses face. This  makes it easier for POS agents to maximise their earnings.

4. Strong Community Trust

POS agents benefit from being trusted by their local communities. They get more customers through referrals and generate consistent business. Hence, it’s easier for POS agents to grow their business with minimal effort. Small businesses, however, often struggle with customer retention and are forced to always look for new ways to make sales.

5. Less Exposure to Unsold Stock

Sometimes, a few goods remain unsold or expire, hence, the small-scale retailers often face the risk of financial loss. But POS agents avoid this risk entirely since they don’t handle physical goods. They don’t have to worry about unsold stock taking up space or losing money on items that don’t sell.

6. Expansion with Add-on Services

Some small retailers expressed interest in adding POS services to their business model to increase their income streams. The idea is to offer services like bill payments, airtime top-ups, and data recharge. However, POS agents often prefer to avoid the added stress of managing physical stock.

Our Take

In conclusion, POS agents have a distinct advantage over small-scale retailers. They enjoy steady cash flow, little to no operating costs, and minimal inventory risk. But small businesses usually struggle with running costs, and unsold stock amongst other things. 

If you’re a small business owner looking to reduce running costs or add another revenue stream, offering POS services could be a lucrative opportunity. Tap into the growing demand for mobile payment services and enjoy the benefits of a low-risk, steady income with the flexibility and ease of operating a POS terminal like Kashzoo.