How would you handle this situation?

[equippaint]

Im not scared to roll the dice if its a solid deal especially if theyre switching vendors for quality issues. Youre testing them as much as theyre testing you. Id much rather find out that the customer is an overly anal pita on a small sample run than get into production and start fighting it until the job is done. Weve all been there.
As far as being $175 less, there sure are a lot of people basing their opinions on that without knowing what the bid price was. What if its $175 off $10k?
Another thing mentioned was being slow. How much does it cost to under utilize an employee and machine, even for shorter periods? Im not advocating giving stuff away but id rather cover my overhead and make a tiny bit than sit back waiting for a higher margin project to come in. Its different when youre highly utilized but thats not the case here. I may have the wrong approach but I look at it like it costs me 40/hr for every hour i cant bill a head to a job. I try and make sure we always have something, skinny or fat, to keep idle time from reaching into my purse.

 

[OPENSignsInc.]

I'd show them prices on 1-10 batches up front. I'd charge them the regular rate for the single run and then discount them as they got more batches. But show them the grand total, when they get the 10th batch, that it would match their price or the $175 less or whatever. The only issue I see is if they come back for an 11th or more, that you don't lower your prices too much more and cut yourself too short.