The Cost of Knitting

I've seen some lovely knitted items on Etsy.com and people keep saying they are selling their knitting. But I've never been able to sell a single knitted item on Etsy. My prices reflect the time invested, and I see many other knitters only covering the cost of their supplies. They don't seem to add any wage for their time spent. Not all of them, but some of them. I do know one lady that manages to sell $300 hats. But I just can't see selling a handknit hat for $20.00. And I can't compete with those that do. I know they are trying to compete with Walmart/Kmart prices. Or they live in countries where $1.00 an hour is considered a good wage. It's really a no win situation.