Psuedo rant and possible math calculations are located beneath these lines, tread carefully.
=====================
I figure it might be best to put this into something with numbers. People always like numbers, they think its objective and true. Anyway, lets say that you have someone who makes cables for a living. Lets say that they have graduated from school and deserve the average salary for a graduate of 46k/year (source:
http://www.simplyhired.com/a/salary/search/q-college+graduate).
Since they have to do the work themselves, they have to pay their own taxes, get medical coverage etc... and don't forget they must get hazzard pay since soldering isn't exactly "cancer free" as the state of california claims. So its not as simple as just stating that the person needs to charge $23/hour to get the 46k/year, they actually have to charge more. I used this calculator to determine how much an employer would have to pay to employ someone working at 46k/year with benefits. Try it out to see how much someone is actually paying to employ you.
http://politicalcalculations.blogspot.com/2010/09/how-much-does-it-cost-to-employ-you.html
Using the calculator I got a rough estimate of $85K/year. So based on that, someone who works for $23/hour should actually get paid $42.5/hour
Taking an LOD as an example, someone can build one comfortably every 20 - 30 minutes, depending on the type of LOD. Will it be low profile, will it be a custom design, will it require capacitors/resistors etc... I'm not factoring cost of parts, but just labor. If you've ever built an LOD, its fairly straight forward if you use the old apple docks (big ones) but the smaller ones with caps and resistors can be a bit of a pain in the butt and often add time to you work without you even noticing.
In this case, the person should charge Parts + $21.25 for the LOD to make the 46k/year mark. And if you are curious about how much of that money they get, don't forget that they get taxed 30% for those profits (labor) and also have to pay either an ebay or paypal fee, which is roughly 6% for ebay and 3% for paypal. This leaves them with $13.53 for that one LOD. If you assume they make 2 lod's per hour and include with that the time to package and ship, then the person would be making 27.06/hour, which looks pretty good, putting them in the appropriate range to make 46k/year (after paying for benefits etc...)
Of course there are other associated costs such as talking with customers, which can take quite a bit of time, and there are other associated costs with different projects, like if you are starting something new and require a bit of trial and error.
Now, anyone who's in their 20's and really isn't looking for much more can probably be happy with a job like this, but obviously for companies like ALO, who are trying to expand, and get bigger, that kind of money just won't do. And its certainly not something that a person with a growing family or bigger ambitions can really live on. And by big ambitions, I mean retiring.
As far as parts go, the bare minimum for an LOD is the dock connector, a plug, and some wire. If you buy an LOD dock from sparkfun its I believe 4.50 + shipping and from Qables, its roughly 2+ and shipping (from Europe). And the Neutrik Right Angle plugs that everyone seems to use regularly sell for 3.69. so you can make a basic LOD for about $10, and with fancy wire (silver/occ copper etc...) for anywhere from $20 - $30 and maybe $50 for a picolino. So I figure an LOD should at minimum sell for $35 and probably extend to $75 for what people would take to be fair pricing.
And by fair pricing, I mean paying an employee enough to get them by in their 20's without the possibility for growth, improvement, and a future. Now if you include marketing, sponsorship (eg being a sponsor at head-fi), stocking merchandise, buying raw materials, customer support, emergencies, and other risks/tasks such as administrative duties (primarily dealing with gov't type filing and paperwork). Well then, Walmart's looking pretty good right about now.
Wow sorry that took a bit longer than I thought it would... so I'll put a warning at the top.
