For any kind of ‘craft’ business, you ALWAYS want to sell stuff for as much as you can get.
(the material ‘cost’ is immaterial).
To figure this out (marketing 101-establishing the market feasibility of a small scale manfactured product):
Start by selling stuff ridiculously ‘cheap’. This will show if anyone even wants what you have to sell.
Begin raising the prices until the demand is where you want it to be, i.e; you are selling at a satisfactory level (making how much money you want) and are able to meet the demand (you decide how ‘hard’ you want to work at it).
Many folks feel that once they have sold something for a certain ‘price’, they are ‘stuck’ with that price, especially for that customer. This is both erroneous thinking and foolish. Prices change all the time. If someone questions a price increase, explain that you are responding to the economics of your business, and if they don’t want whatever it is at the price you charge ‘now’ they are free to purchase elsewhere. Or do what I do, tell them it’s up to ‘YOU’ and that you get to decide what it sells for. THEY get to decide if they want to buy it.
This is where you begin to look at material costs (until then, it doesn’t make any difference, you are establishing feasibility of selling the ‘product’). If the costs are too great for you to clear an acceptable profit, this is the time to figure that out. It’s also the time to look at wholesale pricing for your materials, large quantity purchases/discounts, etc., i.e; cutting costs.
If you never get to that point, then the business will ‘fail’ and it’s not for you, which is good to know.
You might find that since this is a hobby that ypu enjoy, just getting your material costs back (for the flies you sell AND the ones you use?) is satisfactory.
Or, you may want to take it to the ‘part time homebased business’ level, where things like actually making some ‘money’ are involved (don’t forget that you can get some tax benefits here, which can accrue to the profitability of the venture).
Then there is the 'do the full time, you love it and want to ‘be’ a fly tyer.
All doable. But, to be successful, you do have to accomplish the first part: finding how much you can get for your flies and if there is enough of a demand for them.
Good Luck!
Buddy