It has been my experience (at least in my field) that my friends were the last ones to test pricing on.

Family and friends tend to think they should be comp'd on the items. If your research of the market shows your prices to be within the mainstream -- stick to them. after all, your market isn't your friends. It's moms and dads of children who are leaving their toddler years (or so).

Obviously, since customers are providing you with the bulk of the material, your costs are relatively low. But you also have to consider your time. How long does it take to create a bear? A blanket? How much in supplies (thread, etc.) does it take to create an item?

Look up similar products online and see what they are charging.

And always remember your target market!

Good luck!!

Lisa :D