There seems to be a goldilocks zone in smaller markets like this - where you can make a product at a decent profit that looks easy to undercut, and the market is big enough to support a very healthy business ... but the market isn't so big that a competitor can come in on razor-thin margins and "make it up in volume" and displace the genuine article.

Add in the fact that hobby purchases are very discretionary and a lot of people are willing to pay a little more for quality/genuine articles and this business is probably safer from simple undercutting than one would initially think.