liudr:
The 328P is about $4 each.
Wow, you need to get a different supplier, you're getting scammed if you're paying anywhere near that much at any sort of purchase quantity for manufacturing.
I think it's still possible to sell hardware for a higher price if you can provide better support, etc. as in the examples of Sparkfun/Adafruit but a lot of customers are going to just get the lowest price board and there's no way to compete on price with a lot of this stuff. I can buy a board on eBay for less than it would cost me to mail it to my neighbor. If you can come up with a new product then there is no competition at first but if it's successful enough the clones are soon to come so you have to be constantly innovating.