This is probably a question that is asked more by new eBayers than any other. There are also a thousand different answers, depending on your circumstances. Many will suggest that setting the price low (such as $0.01 or $0.99) with a combined 10-day auction duration is an excellent way to attract bidders who will start a bidding war and quickly drive up the price. Common sense tells us this will work, however, only on items that will receive the attention of bidders. For instance, if you have done your homework up to this point, you have a good idea about what the competition looks like, number of completed sales, average sale price, etc. for your product of service. If your product is in a niche or highly sought-after item, you can feel safe using a low starting price as you know the competition will drive up the price. If not, you are destined to profit failure as you watch your item sell for many dollars less than it should.
Another safe and effective method is to determine what the minimum price is that you need to make a small profit on the item (say 10-30%). This price should take into consideration, all listing and sales fees, as well as handling, procurement, and other overhead that should be spread out across all of your expected sales for the year. Using the determined minimum price, set your auction starting price to this value, and then couple it with a Buy It Now price that is higher. This will encourage bidders to attempt to snap up the item at the lower starting price before someone exercises the Buy It Now option. Once the first bid is placed, the Buy It Now option is no longer available. Either way (bid or Buy It Now), you are assured of a profit.