[dredmorbius]

Economies of scale are powerful.

Some economies of scale are attainable with small numbers of (or single) craftsmen. If you can batch operations, one person can rotate though steps of a process over the course of a day, or of days.

Another factor in the Industrial Revolution was the addition of both energy and capital. Where early energy sources were often inconveniently located: mill towns were, literally, located on waterways or elsewhere free energy was possible, often quite distant (and over very poor roads) from major populations, which is to say, either labor or markets.

The revolutions of steam and electricity meant that the scale of operations of factories could be both scaled up and down: smaller-scale equipment means that a local shop can produce goods, though typically this means on a highly specialized basis.

Other factors tend to increase cost of goods: advertising, marketing, and competitive fencing via exclusive marketing arrangements, patent enforcement, and the like.