Back to the topic of dealing with agencies.... I've only worked before as an FTE with benefits. Although I've talked to staffing agencies before, I have taken contracting positions previously.

I was recently presented by an agency for a position at a well-known company. The phone interviews I did with the client went well. When the offer came in, it was for an hourly rate comparable to by last FTE\benefits job, but with no benefits. When I asked for a higher rate to offset the lack of benefits, I was told the rate could not be changed. Due to that and because it would be a rather long commute I decided to pass and sent an email explaining that after careful consideration, I decided the position was not a good fit.

The next day they came back to me offering to reimburse medical, and later, wrote offering me a salary with benefits, which I ignored because I was becoming very uncomfortable with this. I sensed concern and desperation that the well-known client really liked me and now they're unable to deliver.

Is it common in this sector to make the initial offer very lowball and be willing to significantly improve the offer when the confident walks away? Is this a sign of an agency that jerks people around? Does it suggest that the position is a bad working environment that makes it difficult to attract and retain people?

Or did I damage my future prospects by expressing interest in the job and not staying in the negotiation? Did I just dodge a bullet or shoot myself in the foot?