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Education
traditional countertop systems as well as virtual
setups where merchants can manage the entire
system through an online gateway or via mobile
access.
• Implementation: The steeper learning curves
involved in operating POS systems might spell a
challenge for merchants and employees alike.
• Technical issues: Merchants need to know what
to do if the POS system goes down and what back
up technologies can be installed to keep opera-
tions functioning while IT managers work to get
the POS system back up and running.
Long-term relationships
The power of professional sales, in terms of your income
stream, is not found in one-off sales, but rather in ongoing
sales relationships. The latter creates a business asset,
reduces your need to continually produce new sales and
helps fund your retirement.
Technology can help you establish long-term relationships
with clients. The solutions you implement this month
should setup your residual revenue streams for months
going forward. MLS Forum member Mariusz reminded
forum members of the power of this long-term value.
"Merchants who use POS systems tend to stay with you
for a very long time," Mariusz wrote. "I have merchants
who use POS systems and who have been processing with
me for 8-10 years."
The next two years
The next 24 months could secure your entire retirement.
Let's take a look at how. After researching the market-
place, let's say an MLS named Jerry is able to sign up 75
new merchants with feature-rich countertop POS systems
over the next 24 months. This means:
• Jerry makes $1,500 for each POS system sale
($112,500).
• Jerry ties merchant processing, check processing,
stored-value card processing and marketing solu-
tions to each of the 75 new merchants. Let's say
he also gets a portion of revenue off of the service next 24 months could set you up financially for the rest of
fees related to management of the POS system.
And when recurring streams are considered, each
of the 75 accounts produces $150 a month in recur-
ring income after all splits and revenue sharing
($11,250 a month/$135,000 per year).
• The 75 merchants will use the POS systems for five
years. Then through advancements in technology,
Jerry will provide new POS system installations to
each of the 75 merchants on or just a bit after year
five, at the same revenue production levels.
• All 75 merchants remain with Jerry for a total of
15 years. The total compensation for the entire 15-
year relationship with the 75 merchants would be
$2,362,500. This breaks down to $337,500 from the
three rounds of POS system installations over the
15-year period, and $2,025,000 from the annual re-
sidual revenue.
• Let's say Jerry is single, has no kids and lives be-
low his means to where he spends only $30,000
per year on personal expenses and has few busi-
ness expenses at about $10,000 per year. So over
15 years, that comes to $600,000 spent. Let's say
through strategically managing his taxes, he gets
his effective tax rate down to 15 percent.
• This could leave Jerry with at least $1,350,000 in
monies left over throughout this period to place
inside of balanced mutual funds with a compound
annual growth rate of 5 percent. At that growth
rate, he will have at least $2.1 million in his mutual
fund investment accounts at the end of the 15-year
period.
Of course Jerry's personal and tax expenses could change
over the 15-year period due to inflation; tax hikes;
emergencies; and marriage, parenthood or divorce; but
this example exemplifies the power of selling for the long
term.
The rest of your life
As I've said before, the payments biz today requires MLSs
to rebrand to sell new, innovative, complex solutions that
resolve merchants' new, complex marketplace problems.
The field of merchant services will no longer be based on
selling merchant services, but on selling other solutions
and (potentially) tying merchant processing to the
solutions implemented.
This new market requires technical and analytical sales
professionals who also have the capacity to perform
intense market research, comprehend merchants' buying
cycles and provide diagnostic consultations.
Remember, rebranding as a technology sales professional
will help you sell for the long term, which means that the
your life.
John Tucker is Managing Member of 1st Capital Loans LLC, as well as an
M.B.A. graduate and holder of three bachelor's degrees in accounting,
business management and journalism. Tucker also has over nine years
of professional experience in commercial finance and business develop-
ment. You can contact him by email at tucker@1stcapitalloans.com or
by telephone at 586-480-2140.
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