If you're selling something, it's useful to know what the market rate is. If it's something that nobody else is selling, you have to cover your costs - not just the materials but your time as well - and make a little profit besides.
Not everyone will know what the materials cost. I certainly don't. In fact, if they do, they can probably make the item themselves so I would think you should focus on making money out of people that don't know the true cost of what you're selling.
And as far as expecting tips goes, don't. Tips, as Limeblue said before me, are at the whim of the buyer. I think everyone knows people will give as little as they can for something so tips are not likely to cover your costs.