Generally, it is legal. There is no copyright protection available for "useful articles" such as clothing, shoes, etc. Some items (certain bags and shoes) may be so unique that they are protected under a design patent. However, it is a much more expensive process, with a much hgher standard to obtain than a copyright. They have to be really innovative, not just an original work. ("there is no other shoe like this shoe"). There are also instances were fashion designs can be protected under trademark, if you can show that the design is so unique and famous that all consumers associate it's shape with the maker. Again, this is a tough row to hoe. Of course, the brand names are protectable as trademarks.
A bill has been pending in congress for quite some time called the Design Piracy Prohibition Act that would protect fashion designs, but it faces stiff competition from the garmet manufacturing lobby. It's never made it out of committee. Design protection is available in Europe, India and Japan.
The biggest problem you face is that you can't sell knock-offs as if they were originals. You also have trademark issues if you are putting original logos onto knock-off merchandise.
For instance, if you have a pair of sun-glasses and you stamp them "Oakley," then you have to make sure that the buyer knows that are replicas to avoid misleading him about the purchase (illegal). Oakley could raise a stink about the sale as well since you are not selling real Oakleys but you are still trading on the Oakley name. I wouldn't recommend it.
It depends on what you mean by a "knock off" product.
If you mean a product that's branded with, for example, the Nike swoosh, but the product does not originate from Nike, then the sale of that product would unquestionably be illegal. The product would be a "counterfeit" of Nike's product and its sale (and its purchase) would violate numerous federal and state statutes. Literally millions of counterfeit products flood our markets every year. Brand owners (like Nike, Tiffany, Intel, Jordache, etc.) spend a lot of time tracking down and stopping counterfeiters. Please note that it is NO defense to a charge of counterfeiting (i.e., trademark infringement) that the seller advertises the knock off product as a "replica" of the original. Even if the seller and buyer are both aware that the knock off product is not original the offer for sale, sale, and purchase of the knock off are all unlawful. The harm in that transaction is suffered by the brand owner -- and that harm can be, and often is, remedied by a court-awarded money judgment against the person who sells the "replica."
But there is another category of "knock off" product -- normally referred to as a clone. It is not unlawful to sell a product that looks like and/or functions like another product so long as the clone does not infringe a patent, copyright, or trademark protecting the original product. There are, for example, many IBM cloned computers in the marketplace.
It's the first the category of "knock off" to which I think you are referring.