To me it seems like small businesses like this get squeezed by these demands to make everything cheaper while the big corporations ignore it and stick to their pricing.
I’m not sure OP should have capitulated. Someone who loves this tool will probably gladly pay more.
The question is what is the proportion of people loving it vs liking it.
The proportion gets a lot easier to deal with as the price goes up.
Is it easier to convince one person to pay $100 or 100 people to pay $1?