I am just starting to do research on that subject myself. The important thing is that you need to be somewhat unique. In the past few years I attended several craft shows that had multiple sellers selling similar items. Stuff like homemade jewelry, tote bags, rag dolls, knitted scarfs, etc. You want to keep the costs down so people will buy your items and you will make a profit. I recently made yarmulkes. A friend knew someone that wanted one with a St Louis Blue them, my friend asked if I could do it. I found the fabric and sold one for $20. Then I was wearing one at my synagogue with Coca Cola fabric. Someone saw me and had to have six -- that was great. Now I am thinking about making more. The challenge is "knowing" what will be popular eight or nine months from now. Technically, I should not have sold these yarmulkes because they are copyright protected.
Twenty years ago I crocheted yarmulkes for my son's Bar Mitzvah. That was a work of love. They were easier to make, less time consuming, and less expensive than the ones I am currently making. The sisterhood asked me to make some for the Chanukah bazaar. I made 100 - each one slightly different. I had a price tag of $8 apiece. I sold eight and that barely covered the costs of my materials. One woman had the nerve to tell me that I was asking too much money. Then she asked me go GIVE her my pattern so that she could make her own! I told her where I had purchased the pattern and that it had cost more than $8.00!
Oh yes, another thing you have to figure into your cost is the rental of your booth and if there is a percentage per item charged by the operators of the fair.