The idea is to make money.
If you are happy with $1 then that's great, but if you are hoping to make more than $0.99 you should be sure about the market before you throw your item out there for $0.99
At the bottom of listing pages you will find a group of links.
Click on the ebay pulse link and it will tell you whats hot based on user searches. If you are selling something on this list, you might have something that you could list for a penny and still get a fair price for it.
If not, be prepared to sell it for a penny.
When the item you have to sell isn't a popular search item or something people "long for", they can take it or leave it. Now that doesn't mean you can't still sell it...it just means you should adjust your price accordingly.
Perhaps a starting price of $10 or $14 might be a better way to go. It still provides a value to your customer, but you don't end up selling it for a penny. Again do some research and see what items similar to yours, have sold for and maybe you would be happy selling for less than the competition. If so, give it a go.
Basically:
If you sell iphones people are gonna swarm..penny auctions are more likley to do well.
If you sell homemade tissue box covers, no swarm...you can still sell it, but no swarm, so price it at what you think is a fair price and be prepared to sell it for that.
Another factor to consider is "market saturation"...which is just a fancy made up term used to describe the basic laws of supply and demand.
Here it is in a nutshell...supply, or the amount of crap currently available to the genral public directly affects demand...how much the general public is willing to pay for that crap.
If you find a supplier for "product x" and you can get it for a buck and everyone is paying $50 for "product x" you can sell it for $40 for a while, until everybody else figures out how to get it for a buck too, then the next guy sells it for $35, then $30 and pretty soon "product x" is just $1.50 and everyone has one already.
If the maket is flooded with iphones even the iphone won't bring a good price after a while.
