Yeah. Selling on Etsy is really tough to turn any profit given the way you need to price things to be competitive. It's hard for there to be any kind of profit left when you account for the cost of the kit, the cost of the blank, shipping, and then Etsy fees. I suspect that there are a lot of international sellers on Etsy who are advertising things as being handmade but they really aren't.
For me, I sell my stuff on Etsy and Ebay because of the convenience. They take care of sales tax, make it easy to track and ship sales, and provide some level of trust and protection for both myself and the buyer, who almost always doesn't know me. And I can do it from the basement, late at night or early in the morning. Craft fairs don't appeal to me at this stage in my life because I'd rather spend my weekend afternoons with my kids.
That said, I only do this for a hobby. I don't make a living doing this, so I'm able to price competitively in such a way that covers most of the costs as well as a little bit of profit. I think this year, I've got maybe $1000 in sales on Etsy and Ebay and profit of about 25-30%, which isn't too bad. But in calculating that, I don't factor in the cost of equipment--lathe, turning tools, etc.--nor do I factor in my time. My goal is really just to cover the costs of some of the materials, and I'm generally able to do that better by turning more inventory at lower prices than by pricing things higher in a way that reflects the quality of my work as compared to the cheaper stuff on Etsy and Ebay (but that the typical pen-buyer on Etsy and Ebay probably won't appreciate). Still, I make sure that I craft descriptions of my product that reveals my knowledge of the materials I work with and the time I take to make sure everything is perfect.
