I have been searching online for a while trying to find affordable parts for my jeep. I know I wont be able to have everything at a low cost. but there are some things that can be made for $50 of material, and are sold for $1000!
Let me tart by saying go for it. You'll never know unless you try, and if you have other income to get you through the start-up and to fall back then you are doing well.
But, keep in mind, $50 of material is only the start. Right now, if you are working in your spare time out of your house, you may be able to undercut prices. But, that material cost will be joined by labor cost, packaging cost, shipping cost, marketing cost (website, vender license, trade name registration, patent filings possibly, federal trademark costs possibly), etc., etc. And you still have to make a profit.
Even still, you may be able to offer a significant price savings right now, while you are working out of your house and have supplemental income. But if you are successful, you say you will need shop and warehouse space, tools etc. You will need to make enough to pay for these and still make a profit, enough to be your only source of income eventually. Maybe your volume of sales will grow, but then so will your expenses. Bigger warehouse, maybe an employee or two, taxes, utilities, insurance.
I'm not trying to dissuade you from trying, saying you can't do it, or anything like that. I think you should go for it if it's what you want. I'm only trying to make sure you price your product for the future, not just for right now. If you truly want to grow this into your only income, you don't want to find out after six months of building sales that your current profit per item won't sustain a cost structure beyond working out of your house with supplemental income.
Good luck! Keep us up to date with your progress, and buy a gold star to become a vendor here.