The simple answer is the quality of construction and the quality of the materials.
Fabric is available at $2 per yard or $200 per yard.
Fine leathers can cost even more.
Low density foam cushions may cost $30 for a set of three. High quality cushions can cost well over $100.
No sag spring foundations can cost less than $20. Genuine 8 way hand tied spring foundations can be $300 or more.
Cheap plywood or engineered wood sofa frames can be purchased for $20 The cost of top quality solid wood frames will exceed $100.
Automated fabric cutting may be able to cut the fabric for an entire sofa in less than one minute. Hand cutting fabric takes far longer.
Mass produced sofas may be fully upholstered in 30 minutes or less by low paid semi-skilled workers working as a cell with each person working only on a single part of the couch (outer backs, inner arms, etc.)
High quality custom-built sofas are typically bench-made by a single highly experienced (and highly paid) craftsperson who may spend many hours (or days) on a single piece.
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