Remember, your Etsy shop prices need to be as high as your MSRP/RRP (that's the suggested retail price), so that you are not undercutting your retailers.
Even if you don’t end up with a huge wholesale business, how else could this money — the margin between your Wholesale Price and your Retail Price — help your business grow? As Angela from Beat Up Creations put it, “Now I’m working less and earning more.” The higher the margin on your retail prices, the less you have to spend on supplies, production and all the effort and money that goes into making sales. This allows you more time to design and more money to build your business!
True, raising your prices on Etsy may mean that other Etsy sellers who make similar things will have lower prices. But is this their competitive advantage or are they actually losing money? You need to price your work so that you'll be in business for years to come.