This guy must not know how much it costs to do the job! I wouldn't go lower...you'll be working too hard for not enough money!
I knew you were putting that much down because I just entered your numbers into my mulch calculator, and that's what it came up with. Did the guy specify that he wanted 2"? Maybe he's thinking that he just wants it "refreshed", maybe that's why he thinks it's too high? Just a thought.
If I were you I'd stick to my bid...after he starts he might figure out that it's more work than he though...if not...oh well, there's plenty more people out there that will pay well for the work you do.
The Institute for Incomplete Studies found that 3 out of 4