I think alot of folks jump in to this industry not knowing what they are getting into -- and not really knowing the "WHY" part of their business. Meaning... what advantage will they offer to the customer ? What will they bring to the table that someone else doesn't ?
If it's JUST a lower price... good luck! Deep pocket companies with lower overhead will destroy you. There is almost always someone willing to "do it cheaper" -- even if they run themselves out of business... they still took your glory by being cheaper -- and then another guy will come along, again, and again, and again.
If you don't have your own design philosophy & just want to offer "cookie cutter" stuff even at a reasonable "middle ground" price -- even if the stuff is GOOD... good luck! Again... plenty of people jumping in have DEEPER pockets than you with the same strategy & can bury you by offering 10x the variety of "cookie cutter" stuff.
And... YES warranty costs are higher than you think as someone jumping into this as a new venture.
So you better have something unique to bring to the table if you want to make it... and you better realize QUICK that overhead is a real thing; marking stuff up 10% won't cover rent, payroll, utilities, investor interest, etc. Marking stuff up 25% still won't do all that and allow you to grow the business; get real, do research, and realize what it takes to run a company -- people need to be real about it as a BUSINESS. It's easy to skip that part due to passion as an enthusiast. When YOUR business fails it then leaves customers hanging -- it's not just the company & owner that lose out... bad news for everyone.
I know when I started it was pretty rough & I came out of the gate with open-tool amps -- but I quickly moved to make unique products as soon as possible to create a REASON for people to buy from me & pay good money for our brand (enough to grow a business). I know NOW that my early mark-up for the first several years I was in business wasn't enough to even make it worth my time -- but I was young & I'm STILL an enthusiast so it was easy to overlook. I've had to work hard to *earn* the ability to sell unique products @ a level that can sustain and even grow a business.
Anyway... best of luck to anyone that wants to join this industry & build a new, HONEST business. Just offering my 2 cents after almost 10-years in this business.