The Buy It Now option should be just that, an option. It should not be your main thrust for sales. If you set your Buy It Now price too low, then you eliminate the potential for competitive bidding that will generally take the final sale price higher than the original Buy It Now Price. If you set the Buy It Now Price too high and your starting bid price is also too high, you risk no bids, and no sale. However, with the right combination, you attract bidders who will either snap up your item with the Buy It Now price (and a nice profit for you), or provide strong competitive bidding (also resulting in a nice profit for you).
There are some nice tricks people use to encourage Buy It Now activity for their auctions. Some will offer free shipping & insurance “ONLY” if the Buy It Now option is utilized. I’ve personally made purchases this way when all competing auctions would result in a higher total price paid. There is risk with this approach, however. Many people who bid on items rarely read the fine print and only sometimes read all the details of the auction. What happens is many bidders will expect the same free shipping and insurance, even though they didn’t exercise the Buy It Now option. This most often results in negative feedback, something you really don’t want to risk, no matter how clear you were in your auction listing details. Walk carefully in the area of special features for Buy It Now ONLY bidders.