Which items, for example, were really cheap?
Most of all the fabric on Amazon is sold by third parties, not directly from Amazon.
I saw some charm packs that didn't look incredibly cheap to me- $8-$10.
And the fabric you might have seen for $4.99 - that's for a 1/2 yard cut, hardly inexpensive. ;)
The mark-up for fabric used to be close to 100% (wholesale to retail), but I don't know if there have been recent changes to that.
Keep in mind that shipping would come out of that, as well as all the fixed overhead costs of running a shop, leaving.....well, depends on well run the shop was, right?