Handmade stuff versus department sales

I have taken this email from our teams email chats as this email concentrates on quite a few challenges handmade products face.

"I have designed and made clothing. The biggest problem I have run into is people think that custom designed clothing should be less than retail. As an example, I priced a suit at $150, the client felt that was too much because the customer could get it at department store cheaper on sale. I tried to explain that the suit would be of better fabric, fit and quality. At the time fabric was a lot cheaper than now. Let alone the labor of my time. The price she wanted was $75 for a silk suit. At that I would have made less than $1 an hour. The silk at the time was $12 per yard for narrow goods. The customer was not interested.

On esty's Alchemy there was a custom order for Towel cover ups, they wanted two at $10 a piece. They had specific colors they wanted. I figured to get the towels, of which you need two for each garment and the ribbon for shoulder ties would be between $20 and $22 a piece. The cost of materials was way over what they wanted to pay.

I have tried to figure a way to design clothing but cost is always an issue. The only exception is Wedding gowns. If we can find away I would love to do a collection."

(the original email and grammar were edited)