I would say that his costs are a bit conservative even. $10/hr is not realistic for providing support unless you outsource it (I don't have a clue how much that would cost). The actual employee price is significantly higher than just the wage. Even if you aren't selling by retail, there is going to be costs associated with selling the product which he seems to ignore.
It is somewhat shocking the first time you hear about how much products have to be marked up to actually make a profit. In some industries you could expect the markup to be a factor of 10 higher than the COGS.
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You can also set your prices even higher but then use discounting. The higher price implies a better product, and who doesn't like to save money?
It is somewhat shocking the first time you hear about how much products have to be marked up to actually make a profit. In some industries you could expect the markup to be a factor of 10 higher than the COGS.