Affiliate Marketing Secrets

Trying to penetrate the Phoenix market.
It takes about 8hrs to make a hat. Yarn isn’t expensive nor is all the other tools it takes, but it consumes a lot of time. I have sold them from $50 and under. So many people have complained about the price, that they didn’t buy it.
I’ve read Free by Chris Anderson and he talks about how free items get people to buy more. However, it takes so long to make the product that I cant afford to give them away. My competition is usually China made products that sell for 5 to 15 dollars at lower quality. How do I market my hats that are made from scratch, costs tons of time and sweat. Make a profit. Is there a business model for this sort of niche? I want to get away from just friends and family. Any suggestions are helpful because I want to pursue this full time.