You don't even have to explain yourself; just say, sorry but that's the price and move onwards.
Trust me when i tell you, i NEVER got a repeat order or a referrel order from ANYONE who i gave discounted prices or freebies to. The ones who come back to me are the ones who paid what i quoted, period.
Oh yeah, and don't you just love the ones who say that you'll get a lot of business from them (knowing that you're trying to get your name out there), just to get a lower price. I will never forget the one time agreed to make chocolate favors for a company dinner. Before i quoted them a price, they said that i'd get lots of exposure from this order......blah, blah, blah.............I gave them cost price (don't forget, chocolate costs a lot of money and i boxed them nicely as well)....didn't make a penny....worked really really hard.......................and got not even ONE order from there. Not worth it.