Its like this in all business. Im not a printer, im just trying to get started in the sesign/brand end of things but I had a successful remodeling business for 20 years.
There was never a shortage of customers wanting to supply there own materials to keep from paying the mark up, thanks Home Depot, or squirrely contractors underbidding jobs, sometimes below what the materials would even cost from any of the lumber yards. On occasion I would lose a job to one of these characters but would get the call back to fix the disaster after the con artist took the money and ran.
At the end of the day it all comes down to building good relationships with customers and how you present your invoice/estimate. part of building that rapport is explaining your pricing schema being transparent enough to build trust without giving away the whole enchilada.
IE. cost of supplies for the job are broke out per phase but not itemized. An simplified invoice I might give a customer looked like this. The real thing was a lot more detailed and impressive looking but this gives you an idea of the strategy that was employed.
Materials:
framing: wood- 2x4, 2x20, pressure treated nails, misc = $200
sheetrock: gypsum board, glue, plaster, nails, misc = $225
Labor: prep site, demolition, framing, hanging sheetrock, finishing sheetrock, clean up = $600
Business cost: dumpster, overhead, inspection fees = $500
total = $1525
So for printing might look like
Printing medium: apparel
Materials: 65 AA shirts black, ink, chemicals, packaging = $300
Labor: art optimization, pre-treat, labor, overhead, screen set up = $200
total = $500
price per shirt $7.60 whatever it works out to. (There are a lot of ways to present the numbers, this is just the way that worked best for me.)
The more you break out in each overall line the more the customer sees what all is involved. This helps the customer feel there is more value in whats being done and dispels the notion that its just getting a shirt and putting ink on it.
Of course there will be folks that pressure you for a line item breakout. You just tell them its your policy not to do that type of invoice/estimate due to supplier agreements or whatever, and ask if they feel the price is fair.
If they try to talk you down dont budge unless you built in wiggle room in the price. Everyone seems to think its ok to haggle with a service provider thats not a massive corporate entity. reassure them that the price is the best you can offer and most important build the value of your service again to them. Warning of the potential pitfalls of using cheaper services. Its about salesmanship. Think of the movie Tommy Boy.
Also dont be afraid to let certain customers walk regardless of the job size. Sometimes its a blessing in disguise as doing business with them is more costly than the job is worth. I have flat out refused to do business with potential clients based on the "pain in the a**" metric in the first couple of meetings.
There will always be undercutting whether on the service side or retail side. All we can do is build the perceived value of our product or service, use best practices, be trustworthy, fair, and honest.
I know you guys are old pros and been in the business for a long time but I hope theres something to take away from all that mess. haha
good luck