I agree with those who say that people will not pay anything close to a fair price (in terms of materials and time) for hand-knitted items. I knit a lot, and am often told that I should sell my work. I am sure that people are being kind; but honestly - who would pay £170 for a pair of socks (£20 for 100g of good quality yarn, plus 15 hours at £10 an hour, which is a conservative estimate of how long they would take, depending on the pattern)? They are £5 for 3 pairs in Sainsbury's .
The only way I can think of to make money is to personalise baby items and package them as high-end gifts. I saw cashmere items like little hats and bootees in a gift shop once, and they were selling at £55 an item. They came with a little tag saying something like 'Welcome to the world, baby (space for name)', and were packaged in a good quality box, on contrasting coloured satin that matched the ribbon in the bootees or hats.
They looked lovely, would be quick to make, and would have made a really nice present in the sort of market where people can afford to pay a premium price, but you would need the contacts to stock them, and would lose a significant cut straight away. Most local gift shops or craft fairs would be lucky to sell them for a fiver - not everyone appreciates yarns such as cashmere, and many people prefer acrylics that can be washed and dried in the machine.