Don't sell yourself short. You're worth more than $1 an hour!
When I had my soap business I made good part time money if you just went by the net profits. I could count on 1,000 or so on a good weekend.
But really it was a full time job once you counted in making (raw prduct and shopping for raw materials), marketing (cutting wrapping product) and selling (actually being at a fair). I would end up making a mere 60 cents an hour sometimes.
How long does it take you to knit your totes? Handcrafters probably can never count on getting paid their true worth. We are all worth at least $50 bucks an hour right? Sadly no one is going to pay $260.00 for a 4 hour scarf. But you have to pay yourself more than cost of materials.
Otherwise you under-value yourself and this opens the doors for others to under-value you also.
You cant compete with Walmart or even a department store. But your work is unique - thats presicely why you dont have to compete. No store can offer the quality and craftmanship that you can. If someone is unwilling to pay you for your time - then they arent really looking for genuinely handcrafted work. Not to be harsh - but seriously, if someone says "I can get it else where cheaper" then tell them to do just that!