As the owner of a small business, I have always been taught NOT to be the cheapest, but to position my product and its pricing in accordance with its perceived quality. (There will always be newcomers offering cheaper prices. Look for them in a year or two and they will not be there.)
Often, customers and potential customers wishing to haggle from the start are those that are the most difficult to deal with and never come up with the future business they initially promise. The line 'if you give me a good deal on this then there could be a longer-term better deal' translates as, 'I want your best price now, when I am ordering in larger volumes I will want an even better price, and if you don't offer it I will go elsewhere.'
As you have found, if you want high quality product and good service then you are unlikely to be wanting the cheapest.