Hi Jill,
I have had the same situation a couple times. And I have never cut my fee's. I just tell them that they are already getting a great rate for the work I am doing for them, and that I will not cut any fee's any lower. I had one customer that when they faxed their order to me they told me "they can no longer pay my fee" and that they could only pay a certain amount which was $20.00 lower than what my fee was. I promptly told them then I wouldn't be able to continue doing their work. They are still a good customer and are paying my fees. I have found that when you tell them that you are in business just like they are to make money, then they seem to understand.
Hope this helps at all, but I would never let a customer dictate fees to me.
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