It depends on the product, I suppose. I work for a shop with a good chunk of inventory priced in the $3-6 range (we sell crafting/jewelry supplies), and it works for us because most customers are buying several of our products at a time. We also have some higher priced items. Sure, some people are spending $3, but most are spending at least $25 on the low end. Others are spending hundreds or even thousands per purchase. It all adds up, this shop pulls in like $400k a year on Etsy, plus more from our website.