Heya Nigel,
I just answered your question on my blog here:
Mind-Manual » Musings about Intending Money
And thought of something else. You see, that's where perceived value comes in and that's where marketing comes in. You have to convince people that your product is worth more, however you do that.
From a business perspective, you can have higher margins than your competitors if you have some sort of competitive advantage. A sustainable competitive advantage is even more important.
Competitive advantage - Wikipedia, the free encyclopedia
A competitive advantage allows charging more for what you make and if you can convince enough people that its also worth more, then you're laughin. An example I gave of a competitive advantage was distribution channels (which is a huge competitive advantage of Coca-cola--in sip taste-tests people prefer Pepsi). Another way to create a competitive advantage is to differentiate your products in some way and have customers recognize that. I dunno how you can do that in picture frames other than try out a whole bunch of stuff.
Commodities = problem, they don't really have have a competitive advantage other than price, and the problem with that, like I said, is a that its a race to the bottom, unless you can differeniate your product. For example, wood is pretty much a commodity, but you can actually find speciality woods serving niche markets that are moving at a premium. So I'd imagine it is possible.
HTH. I need sleep, so excuse any rambling parts of what i said.