I run a side business, selling a specialized gadget that I manufacture, not bike related. Granted, I add value to the product by assembling it, so it's not like being a retailer of ready made goods. I can add up what I pay for the parts that go into a gadget, and how much I sell it for. I try to keep the ratio somewhere above 4x, and preferably 5x. I suspect that anybody who tries to undercut me at this rate, is probably not considering all of their costs.
A retailer approached me to sell my gadget, and we realized that there was no middle-ground price that would be worthwhile for both of our businesses. So I continue to sell direct to the consumer myself.
I think it's hard for anybody to guess how much profit a business is making. It's different than mark-up, because a business has a variety of costs, including labor. I'd say it's "fair" if the business is paying a decent wage. Unfortunately, wages have stagnated in the US for decades. I don't see a good solution to the declining-wage problem that doesn't involve fairly extensive redistribution, which I support.
Some businesses have phenomenally low margins, such as supermarkets and gas stations. Others, very high. It's hard to be in any business where consumers are doing aggressive price comparison shopping.