Don't really see why an order for 100 should entitle them to a 25% discount. Its very generous of you, but if you were making pens for a living, whilst you are producing their 100 you are not producing anyone else's. I realise that such a quantity commands a healthy discount, but there is a tendency amongst many craftsfolk to give money away needlessly. I think I would be tempted to pitch at 15% discount, which if they grumble gives you room to move to say 17.5%.
Having said that, your £12 non-discounted price is pretty cheap in the first place in my view. I would be asking more even with a discount. In batch production, akin to Neils working practice above, I assume that a simple two barrelled pen takes half an hour in total to make - from the time you pick up the wood in its raw, unblanked state, to the time you finish assembling it. Plus the parts, plus the consumables, plus the overheads. How much is your time worth an hour?
