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The stores have to make a profit too. They make as much, if not more, on each piano sold than the companies that produce them. The same thing applies to the stores (employees, administration, building rent, electricity bills, etc.). And they have no choice but to make a bigger profit on each product since they sell a lower amount of products than an electronics store).
In the apparel industry, the wholesale price is usually about 200% of production costs, and retail price is about 250%-300% of wholesale price. So basically, the final price is about five to six times the production costs. I don't know if this is a general rule across all retail.
According to this book, it takes eleven months to make a Steinway concert grand piano from forest to finish. I'll bet my cheapo spinet didn't take that long.
Interesting thought: a Jupiter 8 would sound exactly the same, whether lovingly assembled by hand one at a time on a master technician's bench, or mass produced in a Shanghai sweatshop. But acoustic instruments still benefit greatly from the efforts of craftsmanship.
Don't forget the ridiculously specialized equipment that is required to build a piano.
Once upon a time, when pianos were standard equipment in most homes and canoes were the dominant form of inland watercraft, small companies could buy components (the action, the keys, cabinet parts) and assemble them in relatively small local factories. The quality of the piano would depend on the quality of the parts and the expertise with which they were assembled. I doubt that sort of thing is possible these days.
Making a piano involves 1000s of secret methods passed down from generation to generation. Watch the documentary The making of Steinway L1037. If you attempt to reinvent how to make a decent piano, prepare to make 100's before you get anything half decent. Unless you train under a seasoned expert.