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Hardware Procurement: Is Hardware a Commodity?

The hardware used for today's Point-of-Sale (POS) solutions is generally categorized into one of two categories: Open-market hardware and Protected hardware.

SupporTRAK defines Open-market hardware as hardware such as PC Server's, receipt or remote printers, some touchscreen terminals, and other hardware devices that are available without restriction from a wide variety of sources.

Protected hardware is hardware that, for varied reasons, is only available for purchase when certain conditions are met.

Open-market Hardware:
Most POS hardware falls into the Open-market hardware category. Open-market hardware today is a commodity product. It is a relatively simple process to locate multiple sources for Open-market hardware and to perform price comparisons for Open-market hardware by performing a search on the Internet using keywords such as "POS Hardware" or "Point-of-Sale Hardware Resellers".

Sources for new Open-market hardware include local computer hardware resellers, local POS Dealers, direct sales from the hardware manufacturer, On-line business-to-business marketplaces, and Internet-based companies that specialize in selling POS hardware. Some of the companies that specialize in selling POS hardware to Multi-Unit Foodservice Operators or Chain Store Operators have gone to a "no haggle" approach and provide standard volume purchase pricing based on the quantity of a particular hardware device that will be purchased.

Protected Hardware:
Some POS hardware falls into the Protected hardware category. Protected hardware cannot generally be categorized as a commodity product, because there are restrictions on how the hardware can be sold. Surprisingly, some of the most popular POS touchscreen terminal hardware currently used by Multi-Unit Foodservice Operators and Chain Store Operators is Protected hardware.

POS hardware manufacturers are able to "protect" their hardware by offering the hardware only through limited distribution channels, or by requiring that the hardware only be sold in conjunction with software as a bundled solution.

As an example, one of the market share leaders in the manufacture of POS hardware only ships hardware to a reseller when the reseller indicates who the customer is that is implementing the system and what software will be bundled together with the hardware when installed. If the reseller is unwilling or unable to show that they have also sold software with the hardware, the manufacturer will not ship the hardware.

There is a "gray" market for Protected hardware, but sometimes the process breaks down and a piece of hardware slips though without restriction. However, the End-Users may be unpleasantly surprised when the equipment breaks and a warranty claim is attempted. It is possible to find multiple sources for Protected hardware, and it is possible to price comparisons, but generally, those authorized to resell protected hardware products are not willing to take a chance on violating the policies and rules set-up by the Protected hardware vendors.

Submitted by SupporTrak .