Consignment Software
in the Cloud

Web-Based Consignment Software Sales Hype

Security Risks and Reliability are genuine concerns when placing your business 'in the cloud'.

• Do you really want to take responsibility for placing your customers' information online where it can be accessed by hackers?
  • This fact alone should deter everyone from depending upon the Internet and a complete stranger (the software provider) for a business platform. Personal guarantees made by a person attempting to sell software on the Internet as an LLC (Limited Liability Company) are completely worthless. No one can assure you that any computer connected to the Internet can't be hacked, including his. Do you want the liability?
• Do you really want your business to be dependent upon your Internet connection, 'his' Internet connection and 'his' computer when you can install software on your computer, avoids risks and remain in control?
  • Software installed on your computer, disconnected from the Internet, is the only way to assure no one can access your store's information.
  • Controlling your computerization is the only way to make certain that you will be able to operate continuously, even if the Internet is down or the electricity goes out (thanks to laptop batteries and power backups for desktops).

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Work from Home for Free!

Using your own computer and the Internet, you can do these things (from any computer with an Internet connection) without having to pay exoribtant endless monthly fees to 'rent' a cloud-based computer and software program:

1. Just 'check in' to see what's going on.
2. Add inventory and add/edit new-consignor records.
3. Process, edit and void sales and print receipts.
4. Process, edit and delete settlements.
5. View and print reports.
6. Send reports to customers (or anyone) in printable format.
7. Allow consignors to enter their own inventory and view their account information.
8. Observe how employees are using the program without them knowing. (Great for deterring employee theft and observing procedures.
9. Train employees in real time - remotely.
10. Lock employees out of any part of the program.
11. Prevent employees from granting discounts or voiding sales (common methods of theft).
12. Audit the till in real time.

That's right! All of this can be done without having to pay $150 per month to rent someone else's computer to run your business (and the monthly fee will be $150 for more than 150 consignors!)

About the only things that can't be done remotely are print jobs, like agreements and labels but even those tasks can be completed if someone is at the store, or when you return to the store.

Below are some of the 'selling points' cited by those attempting to line their pockets with endless monthly fees for 'web-based consignment software'. Some of the advantages listed are also true of computer-based software (which installs on your computer and does not require endless monthly fees). Other alleged 'advantages' are pure nonsense:

• Work from Home - or Anywhere!
  • This is possible with computer-based software as well. Not a unique feature of web-based.
• "No long-term contracts!"
  • There are no long-term contracts with any software program!
• "Pay as you go!"
  • Most software vendors offer 'financing' to reduce cash outlay for software and hardware.
• "Quit at any time without penalty!"
  • Not a unique feature of web-based software.
• "No up-front cost!"
  • Sales hype. When you submit a business plan to a bank for a loan, they could care less about the first month's cash outlay. They want to know how much will be spent over 5 and 10 years.
• "Low start-up cost!"
  • Totally misleading. Initial cost isn't nearly as important as total cost - and most software vendors will accept monthly payments.

    

• "No installation needed!"
  • Installation takes a minute or two. Avoiding it doesn't warrant thousands in extra cost over computer-based software.
• "No more paying for backups!"
  • The better computer-based programs today also provide free methods of backing up data locally and online.
• "Your data will be safe - guaranteed!" (by whom?)
  • The best way to 'safe guard' your data is to backup your data locally (for free). Ask the person who is making this 'guarantee' what assets 'he' has backing his guarantee. If 'he' is operating under an LLC (Limited Liability Company) like Traxia under Vitalwerks Internet Solutions, LLC, 'his' personal assets are presumably not involved and if there are no assets in the 'LLC' there is absolutely NOTHING backing any guarantee made by 'him'.
• "No server needed!"
  • Nonsense. (A 'server' is a computer housing the program and database.) A server is only used on a network, so if you don't have two or more computers connected locally, there's no server anyway. The program and database are still on a 'server' but under 'his' control, not yours, and he's charging every business what it would cost to rent a dedicated server just for one business.
• "Tons of great features!"
  • Most programs have 'tons of great features'! The question is, "Are features available in web-based software that aren't available in local software that are worth the enormous added cost?"
• "Keep working even if the Internet is down!"
  • Last checked, the web-based software had no feature which would allow you to keep working when the Internet is down (your Internet, his Internet or his server). The remedy offered was to reconnect to his server using a cell phone. That won't do any good if his Internet or server is down. Moreover, running a business on a wireless signal is unacceptably slow and complicated.

That's quite a sales effort but and as sales pitches go, it paints a rosy picture of a very expensive and dangerous way of doing business - on the Internet with you out of control and substantially at risk, especially given the recent Heartbleed security breach.

There's no mention that a program over the Internet runs [much} slower than a program running on a local hard drive, and those with slow Internet connections (dialup, satellite, wireless, ADSL and poor-quality DSL) won't be happy with it. Using a laptop or tablet on a wireless connection will be slower than Cecil Fielder trying to beat out a bunt!

There's no disclosure about the data guarantee: What is guaranteed? Who backs the guarantee? What happens when data is lost? Is store compensation guaranteed? Much better that we as shop owners back up our own data locally and depend upon someone with a vested interest in protecting our data: ourselves!

The minimum cost of one web-based program is $1,188 per year. Of course it's quoted as a monthly rate ($99) to sound more palatable but for any store owner planning on being in business for at least 5 years, the minimum cost of using this web-based software is $99 X 12 x 5 = $5,940. As stores grow and add software users, the cost can be as high as $149/month or $8,940 in 5 years.

It would also be advisable to know ahead of time what the cost would be to use the software at a second location. Full price?

Basically you would be putting the providers of web-based software on your payroll, paying them every month and endlessly for the use of their software (and their server). Compare this expense to the one-time purchase of a program that installs on your computer for $400 to $600 once!

The Low-Cost Alternative

Get a program that installs on your computer for one set price (just like Quicken, Windows and Photoshop). It's a one-time cost (vs. ongoing monthly fees) and the program will run significantly faster than 'web based'.

Moreover, the all-important aspect of data backup will not be left in the hands of a complete stranger who 'guarantees safe data' via some method over which you have absolutely no control. Who backs 'the guarantee' anyway? If your data goes kablooey, is it guaranteed that it will magically reappear? hmmm... Dealing with facts, the fact is: we don't know.

We only have to ask ourselves, "How much do we trust the Internet, or a stranger who assures us, "It's all good!" and who, incidentally, is the same person trying to convince (what?) 200 people that they should pay him $20,000 per month for this daring venture?" Does 'he' really have the assets to compensate you for the time it would take to recreate and reenter your data, and the revenue lost when you are 'down'?

There are thousands of software programmers out there, all looking for a niche market for which they can develop a 'web-based consignment software program' and make big bucks. As competition enters the market, prices will come down, but the fact will remain that your store is at risk (relying so heavily upon an Internet we don't understand and can't trust) and no matter how low prices go, this approach to good store management might be filed under "Phooey".

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Work Remotely for Free

1. Search the Internet for 'free remote-PC software'.
2. On the shop computer, download and install a free and risk-free program like GotomyPC or Logmein or TeamViewer.
3. Note the username and password provided.
4. Leave the shop computer on.
5. Go to any other Internet computer (Windows or Mac), access the same program and use the shop computer's username and password to access the shop computer.
6. Operate the shop computer just as though you were sitting there in front of it.

Granted, doing some things like printing price labels would be a challenge, but for $1,800 per year in software savings, printing could be wrapped up at the shop next time around, or someone at the shop could do it.

If you just want to 'check in' to see how things are going, or to make some entries or adjustments yourself - you don't need $100-$150/month web-based software. Use the free programs to essentially do the same things.

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Another Way to Work Remotely

Inventory at home? At an estate? An auction? Need to have multiple people adding inventory to the program because there's just so much of it?

1. Open a spreadsheet on any computer. (Here's a good free office suite that includes word processing and spreadsheets: openoffice.org - like Microsoft Office but free!)
2. Enter inventory items in the spreadsheet.
3. Save the spreadsheet.
4. Send the spreadsheet to an email address that can be accessed from the shop computer housing the consignment software program.
5. Open the spreadsheet at the shop.
6. Import the items into the consignment software program.

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Web-Based Consignment Software Costs $1,200 to $1,800 Per Year?!

Simply: "Yes!"

I actually read a post online by someone who thought that being able to 'get computerized' for $99 was a great opportunity, and the person didn't seem to grasp that the cost was $99 every month - at a minimum. She even commented about how software vendors make it difficult for new store owners to get started by demanding large up-front outlays ($400-$600).

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How Dense Do They Think We Are?

These are a few marketing slogans proffered by providers of web-based software:

• "No long-term contract!" Sounds inviting, but there's still a 'contract': The software stops when payment stops, and there's no end to payments as long as the software is in use. Computer-based software is available for a one-time payment with no ongoing fees - a whole lot better than paying thousands of dollars over time for 'web-based software'.
• "Don't buy software that requires annual service fees!" What? How is paying $1200 per year for software use and support better than paying $200-$300 for support? Better yet, get a program with a one-time payment and no annual fees.
• "We keep our prices low so our customers can benefit!" By any measure, $1200 to $1800 per year for any software program, web-based or not, is no bargain and certainly of no financial benefit to customers. The software vendor is the clear benefactor of cloud software.
• "Beware of software vendors making a 'pretty penny' on marked-up hardware!" This caveat coming from a software vendor charging more for its product than anyone else on the planet?
• "Free this and that!" - Adding value to a purchase is the hallmark of good business practice in North America. Apparently this software vendor has nothing of added value to offer.

Just in case you need a good laugh for the day, here's a quote from a web-based software vendor's website:

"Don't spend money on the wrong consignment software. Ask the right questions, make an informed decision, and you will increase your chance that your consignment software will meet your needs."

Retort: Neither your accountant, bookkeeper, attorney, priest or brother-in-law would recommend spending $6,000 to $9,000 in just 5 years for any software contraption that doesn't do much more than a program selling for a one-time cost of $400-$600 (with resale rights).

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Summary

Exactly right: 'Don't waste money on the wrong way.' Web-based software would have been an attractive concept had it not been for security risks and free alternatives springing up about the same time that 'cloud software' caught on. Save your money. Do the remote thing for free.

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