I sell my own products and you better believe I'm making profits for all the hard work that goes into making them (and mine are small). Apple can charge whatever people are willing to pay so I never get the arguments people make when they say they're over charging. No one is forcing people to buy anything Apple is selling.
Now, I already Pre-ordered two watches but if any employees want to buy one for me I'd be more that happy to save 50% and return mine haha.
It takes a comprehensive knowledge of manufacturing and business. Don't feel bad that it doesn't make sense to you.