As most of you I prefer the R+D part. Hence I will start to test the waters with a partner. If they make some profit this is fine with me. Stocking, packaging and selling is work so it should be paid as well. Administration of this stuff is also work so this is absolutely OK.
Good move. If you have an online store that you regularly buy from and you're happy with its quality, you can start from there. That's what I did. Everyone wants some more business 
This has been a good discussion. I've been in the kit business for about a year (http://nootropicdesign.com), and I feel like I've learned more in the last year than in the previous 10 years. Having your own business is very rewarding, but you do have to work incredibly hard. I like to say "I've never worked so hard for so little money." But after working through all the details of stocking parts, running an ecommerce web site, payments, dealing with distributors, shipping worldwide, taxes, etc., I can say that I've gotten fairly efficient with my time.
Packing orders and shipping does not take that much time. What takes the most time is all the work required to bring a product to market. Documentation, photography (I can't emphasize how important good photography is to sales!), online store configuration, etc. take a lot of work. The engineering is the easy part.
It's been really fulfilling, and I've been able to do it while having a demanding full-time day job and a family. It is also very profitable if you sell directly to your customers. Selling primarily through distributors like Sparkfun, Maker Shed, etc. means that they get most of the profit, not you. They demand at least a 40% profit margin, so your wholesale price needs to be much lower than you probably thought. I prefer to use distributors only for international markets, and keep the US market for myself (for now).
Bottom line: if you are willing to work VERY hard during the first year, you can make a kit business a reality.
Thanks for sharing nootropic. Have you paid your test engineers (your kids) for testing your design with games? You should include that in your cost too.
"I've never worked so hard for so little money."
I fully agree. But hearing you deal with tax makes me thing you did make some return from your work to worry about Uncle Sam. Good for you!
I personally don't like packing too much. I'm a bit OCD so I check too many times on perfectly packed kits and always fear I miss a part. I also reuse packaging materials from my own purchase so each package is unique (some had UK or HK stamps on them if you look carefully). It's time-consuming to come up with a different package each time. It's just me. I would mainly go through distributors to ease my brain.
So for those that turn our electronics hobby into a time-sucking, occasionally money-making, but always totally cool and self-rewarding business, good luck to us all!
Have you paid your test engineers (your kids) for testing your design with games? You should include that in your cost too.
My kids do help me with Hackvision game testing, but I don't pay them. The last thing I want is employees -- that is a huge increase in legal/tax complexity! Is this child labor exploitation? Yes! Why exploit child labor overseas when I can do it right here in the US? I will not ship these jobs overseas!
But hearing you deal with tax makes me thing you did make some return from your work to worry about Uncle Sam.
You have to do your taxes for your business whether you make money or not. If you lose money, then your business loss offsets your other income. If you have a business, it's not really optional to do your taxes for it.
I see. I thought about starting a business. But for the extent of my limited activity, I'm better off without a business right now. If I do sell more in the future, I'll think about it again. I can write off tax for parts I buy for development, pay myself a small wage for my work and designate a workshop in my house for my home business. I don't have a house yet. I am one of those that pay income tax but don't get to vote so starting a business is more difficult even when I'm ready.
So have you thought about creating some casing or cover for your kits? There should be some local business you could use to do acrylic cutting and else.
But for the extent of my limited activity, I'm better off without a business right now.
In Aus I think you can declare yourself as a hobbiest that makes money from the hobby. This is to categorize market stall people etc. I think you can make up to $50k before having to be a "business". Still have to do your taxes of course but less other paperwork.
designate a workshop in my house for my home business.
This can be a gotcha. It's great to claim say 20% of all the house bills for the business, but that makes the office a commercial premises and not part of the primary residence, so when you come to sell the house you may have to pay capital gains tax on that part. (Aus conditions YMMV)
There should be some local business you could use to do acrylic cutting and else.
Better and cheaper I think to design your product to fit an existing (and common) enclosure. One thing I notice about a lot of projects is that the enclosure is the last thing thought about (if at all). Better to design that into the project right from the start.
Rob