I don’t have that problem; I don’t sell woodworking stuff.

We do have that problem at work.
We are know for excellent quality and service and all our customer are referrals.
even with that we constantly being asked to match competitor lower price. It is painful but we take the time to remind the customer of the differences between us and the competition.
Unfortunately sometimes we had to let go the opportunity.
A good product cost more to make and great service require really well trained and knowledgeable people. They cost more too.

a couple companies in the woodworking business that are striving even with higher prices that comes to mind are Lee Valley tools and Rockler. I have bought stuff from both even when the price was cheaper elsewhere.

Abbas, Castro Valley, CA