It's hard to get anywhere in the market by touting yourself as the cheapest. Wal-Mart makes it work with volume, an option that won't be open to you. The mark up you're talking about comes with the retailers, which covers both overhead and profit. I'd guess that their markup is not unjustified, in that it's both a risky business, and it doesn't seem that lucrative, otherwise Murray would have a Lear jet.
You'd do well to thoroughly develop a plan, and interview folks who've been in that game. Try Mike Graham or Ray Olson over on Supertaco, see if you can track down the guy who ran Schonhofen Packs in Seattle or Dan McHale who also did that sort of thing.
It's not to say that you can't make a living with excellent designs at reasonable prices and grass roots marketing, but it can be a tough row to hoe. I started a business designing & sewing pile and fleece clothing back in 1979, and hung it up for good in 1985. While I enjoyed road trips to the Valley with enormous duffel bags of product strapped to the roof and selling in the parking lot, production sewing was drudgery personified that could only be partially offset by blasting music and herbal medication. If you're interested in using my old business name, I'm sure my attorney could draft up a franchising agreement: