The way you set your prices can play a large role in determining the success of your business.  Charge too much and you’ll be stuck with a large inventory and no customers, and charge too little and you’ll have tremendous sales—but no cash flow.  If you’re experiencing one of the two, here are three signs that you might need to rethink your pricing structure.

All of Your Customers are Bargain Hunters

Every business offers some sort of sale item to attract new customers, but if the only type of customer you have are those who are looking for the latest and greatest deal, your prices are likely too low. A business can’t be profitable if it only survives by selling discounted items, and if has that type of reputation, won’t attract shoppers who are looking for value.  If you find yourself in this position, bring in some more expensive, quality items and then train your staff how to sell them.

Your Competitors are Charging More—But Giving Less

It’s easy to get into the mindset that if you have the lowest prices, you’ll get the most business.  In fact, that’s the marketing strategy of many big box stores—and they prosper from it.  But small and midsized businesses simply can’t compete that way.  If your competitors are charging more for a product that is of less quality than you sell, it’s a sure sign that you need to raise your prices.  Rather than trying to sell on price and compete with the big guys, tell your customers about the quality of your product and come up with creative ways to show them how, in the long run, buying better quality will save them money.

Your Sales Staff Can’t Sell Without Discounts

You may have unconsciously trained your sales staff to sell by using discounts—and that can be disastrous.  If they are unable to close a deal without offering that “last minute” discount, then you’ve got a problem.  Begin a training program that teaches your staff how to sell quality rather than price, and don’t allow them to use the discounts anymore.  Doing this will not only instantly raise your prices—which will increase your profits—but will present an entirely different image to prospective clients.

If you find that you’re charging too little, take some steps now to change your pricing and policies.  It will infuse some cash flow into your business, and likely bring in a whole new type of client—one who values quality as much as a good deal.