Of course, you arent taking into consideration, a bunch of other factors that determine just how much your profit will be, AND how many you'll sell:
rent
hourly rate and time to assemble per unit
design time
marketting (adverts, websites, posters, pamphlets)
markup (retail takes 40% MINIMUM on large $$$ items, more for smaller items)
product failure
product warranty
tools for production
stock
distribution costs
time setting up distribution
business registration costs
insurance
bla bla bla
true if you wanted to start up a business on a bigger scale. If you want to make effect pedals and sell them one by one as a side thing a lot of the factors are rationalized
rent - I don't see why no-one couldn't solder at home.
hourly rate and time to assemble per unit - this wasn't intended to make a living off. But yeah, you probably have to realize that you might not have the greatest houryly salary.
design time - He did say he already had some designs.
marketting (adverts, websites, posters, pamphlets). Selling on-line would probably be the way to go.
markup (retail takes 40% MINIMUM on large $$$ items, more for smaller items) - Doesn't seem like he wanted to sell his stuff through a retailer though...
product failure - good point, gotta make shure that everything you send out the door is good enough not to come back.
product warranty - good point
tools for production - Assuming since he's an electronics geek he'd have most of the required stuff.
stock - small scale would probably be smarter to sell them as they're finished.
distribution costs - Customer pays for shipping??
time setting up distribution - not a major factor on such a small scale.
business registration costs- different due to what country you live in. On a very small scale this could probably be overlooked.
insurance - not a big worry on a very small scale either.
bla bla bla
I'd say don't spend large amounts of your money at once and be desperate to sell it.
And also reading your last post made it seem like you were still going with the "putting expensive parts in cheap guitars"-idea. Honestly it is a very bad idea, why would someone pay someone else, with no experience, to put extra stuff that they don't get to choose themselves , into a guitar that they don't get to choose.
The probability of you finding a customer who wants that exact combination of hardware and guitar, and who is willing to pay more than the guitar+parts for you to install them, is very slim.
I still say go with the effects pedals.