Suppose you're a customer buying from yourself. Why? What reasons do you find persuasive?

If identical products can be purchased for a fraction of a price elsewhere ... and that "elsewhere" is more visible than you, then you'll have a difficult time.

If, on the other hand, your offering is unique, exclusive, rare, then your pitch will be more credible.

Transparency also helps. Customers understand economies of scale. If you can explain yourself, then they may listen. But don't present your pricing with an apology. Massage the phrasing. You're not small; you're "boutique".

You're not overpriced; no, you respect the artists whose selections you offer – enough to pay them fairly and not cut corners on production costs. While other vendors work with an "assembly line" business model, you take pride in each piece and give it individual care and attention. And so forth.

If you'd like help crafting the words, I can help write copy for landing pages, brochures, etc.

Being a niche is not enough to justify your prices. You need to also consider the follow:
1. Are you niche enough? Sometimes we think we have a niche, but we really don't.
2. Who is your perfect customer? Some experts refer to this as your avatar. Remember, one main characteristic of your perfect customer is he/she is willing and able to pay your prices.
3. Are you giving you customers what they want? If you are just doing what the big companies are already doing, but on a smaller scale, they don't need to go to you because what they want is already being offered by the big companies, AND at a cheaper price. What do your customers want that the big companies are not providing?
4. What are they paying for? What is it about your prints that distinguish them from the ones produced by other companies, and, thus, justify the higher price point?

Don't get too wrapped up in being small and bootstrapped. That is not the clients' problem, and will not be a reason a client will go to you. That is like saying I am charging more because my rental costs are high. This may be true, but it is not a justification, at least, in your customer's mind, to pay more. After all, why should they pay for your rent?

Therefore, you need to go over the questions I posed above, and be a detailed as possible with your analysis.

Over all, you must have a clear understanding of the value of your products because, in reality, clients may not really know what that is. They just know you offer prints, and Co. Biggy offers prints-now who has the cheapest price?

You may know that comparing you and Co, Biggy is like comparing apples and oranges. So, it is up to you to make sure you have clear answers to the above questions, and you are able to point out the value (again, the value is not that you are small and bootstrapped and need the money!) of your product that justifies the price.

I hope this was helpful.

In the 1980's, there was a famous experiment conducted: the "Beer on the Beach" experiment. If you and I are sitting on a beach on a hot day, and I say to you "I'm going to the 5 star hotel at the end of the beach to get us two ice cold beers...how much are you willing to pay?" You'd say (in 1980's dollars) around $2.60. I then tell you I've changed my mind and I'm going to the run down grocery store at the other end of the beach and they have exactly the same beer at exactly the same price. How much are you prepared to pay now? You'd say ~$1.50. There is no logical or rational difference in the willingness to pay, other than the context or environment in which the purchase is being made. How do you make yourself the 5 star hotel?

We were in the same situation (not possible to offer competitive prices), managed to get an edge over the competition by putting all of our focus on one competitive advantage. I wrote a post about what we did -
http://blog.crazylister.com/7-ebay-hacks-we-learned-growing-ebay-sales-from-zero-to-100k-month-part-1/

Hope this helps!

Take your business to a niche where your competitors are no match for you. Take advantage of your experience and expertise. Make it cutting edge.

I write & publish Wikipedia pages, I charge around 3 times higher than what one would get normally from a freelance writer but the ones I create are not deleted by Wikipedia. With a history to demonstrate this, clients accept my higher prices and go for a page once that will stick rather than creating bad faith at wikipedia by going for non-compliant pages. This ofcourse involves real effort, expertise, technical know-how, a decade of experience, diligence and compliance from my end to ensure that it's worth the client's risk.

See how it fits to your business and how you can make sure that client is infact *willing* to pay your higher price himself rather than going for a lower priced "competitor". I put it in scare quotes because you are essentially wiping out competition and making sure that your competitors are no more your *direct* competitors.

You may already be there, but to relate that fact to the client and for client to be able to recognize and *appreciate* this, you would need to optimize your cover letter / sales pitch that does not delve into general promotional stuff about you - rather this should be a compact informative brief about what you can do which does not just out competes others, it makes them irrelevant for the client. As Jon Manning said, you will need to demonstrate yourself as a "5 star hotel" with actual work or credibility of past *clients* you've worked with. Once you've done that, the client will rather negotiate with you for hours to perhaps lower your price and finally accept *where ever* you take your last stand, but still not go to another provider. In anycase, it's an iterative process.