Deals with Other Business Owners (Cross-Promotions)

I've been in business for exactly less than a year so let that be my caveat.

Just because the arrangement is mutually beneficial does not detract from the value of your work. I'm looking for exactly this kind of relationship too. I hit upon the idea of making house and 'for sale' sign cookies for realtors in this area who sell  high-end houses, since I know they put together a gift basket for potential clients. They'd be promoting my business, but my cookies would every bit as much be helping theirs.

So as to your question of fair or unfair: these cookies we make are like little pops of joy. People's eyes light up and they smile. I'm not sure you're not helping her business much more! Maybe you should charge double. If her promotional budget won't allow for your cookies right now, someone else's will. 

Just my two cents. Good luck, hope this helps. 

I tend to agree with @Terry H.. If someone wants to use your product to promote his/her business, they should set aside some promotional budget to do so, just as they would to purchase business cards, ads, signs, etc.