I'm sure you can all recognize an exchange such as the following:
“I'm sorry, we cannot accept your rate of $ 0.X/word. But if you accept $ 0.Y/word, instead, we can guarantee you plenty of work."
A problem, sometimes, is that the promised "plenty of work" never actually arrives but your new customer insists you have to bill them at the high-volume rate. The real problem, however, is if they keep their word and start to swamp you with plenty of big projects.
Yes, your income might appear to go up, and you'll feel the thrill of always being busy. Doubts will begin to creep in, however, when you find yourself turning down assignments from other prospects because you are always busy working for your high-volume customer - especially when you have to refuse higher-paying projects.
Also, if you are always busy working for your high-volume customer, the percentage of your work coming from them creeps up over time, which puts you in a risky situation: you are letting yourself become a hostage of a single customer.
If (but I think I should really say "when") your high-volume customer comes back to you demanding further discounts (maybe lamenting the difficult market situation, or whatever), and you have allowed yourself to rely on them for 80% of your income, you'll be hard pressed not to give in (not only that, but you'll have already showed them you are an easy mark - after all you already lowered your rates for them, didn't you?).
So, in short, if you give in to request for volume discounts:
- Sometimes you will give the discount, but won't get the volume
- When you do get the volume, you'll find yourself turning down higher paying jobs because you are so busy on the lower paying ones
- And finally, you'll find yourself an easy target for further discount demands.
So tell me again: why did you think it was a good idea to agree to your customer's high-volume discount request?