Disclaimer: There are many ways to play the game, and one may be to provide things to the community as a whole at a discount. That's admirable, though annoying to me insofar as it limits the emergence of an interesting market. But I wouldn't tell people not to do so or that they're bad for doing so.
However: I don't think that the majority of people are that altruistic. Yet when looking on the auctions, it's frankly surprising the vast amount of items sold at a pure loss. The purpose of this topic is to provide information so that if you don't want to give away profit, you can avoid the same mistake!
The often overlooked downside to the auctions is the listing and commission fees. Altogether those cost a total of 9.5% of the listing price if the item sells (Let's hope!). But what this means is when you see that your items are going for a nice 200currents each, you're not actually getting 200currents each!
Now the main alternative to selling to players through the auction house is selling to in-game vendors. Unfortunately this means the items poof away - but don't fret! You're actually helping the economy by sinking some of the vast amount of resources that people produce! It's good for everyone! When selling to vendors, the only real choice is whether you hike to a Tool Vendor or not - these guys, one in Cebarkul in Uralia and one all the way in the Ilmenskie mines, buy items for 80% of their listed value. Good deal!
So, if you know that no matter what, you can get 80% of the listed value, what does that mean to you in terms of auctions? First thought would be hey - if I'm selling for over 80% that's a good deal. But no! Remember those fees we talked about! In fact, if you're selling for anything under about 88.4% you are getting less money than if you had just sold it to Mr. Tooly.
(Math break! Finding the breakeven point, let's assume a 100c item:
90.5% * aucprice = 80% * 100
aucprice = 88.39779 currents - sell above that and make money, sell below and lose)
Now look at the auction house. Look at awesome stew. There are over 200 stews priced under the 176.8 breakeven point! Some way way under! There's >50 Earthshakers under the breakeven point! >150 no-no powders under! I bring all of these up because they're some items that are bought and sold a lot. Please note that it's not worth buying and trying to resell these yourself, but you don't want to fall into the trap of undercutting them further!
So next time you go to sell something, this is all you have to remember:
Value * .884 = Minimum Auction Price
If people are already selling under that price in large numbers... Take a hike to Mr. Tool Vendor. :)