I have no clue about cross stitching (just saw your post in all) but this...
but that seems like it ends up making things more expensive than people would be willing to pay...
... is not necessarily an issue. Not everyone is willing or able to pay an adequate price to make up for your time and material. Handmade stuff is a kind of luxury good after all. Turning down some requests and not making everyone happy is an important step IMO.
Did you check Etsy or similar platforms already to check out other people's prices? Focus on people in your geographic area. If you're living in a high-price country, you can't compete with low-price countries.