It's interesting (if not terribly surprising) how most of these Etsy businesses simply don't scale. The thought of making the same thing over and over again is really quite foreign. I sometimes forget how much leverage we have as coders.
I'd bet the lady selling scarves could simply design the patterns and farm the production out to a couple women paying them $30k / yr (and take home $80k+ herself).
It is very much a Catch-22.