Really, as long as I'm making a decent percentage over the material investment for craftables and NPC value for gatherables, I'm ok with that. I'll undercut people if they keep undercutting me to the point where it's not worth it anymore and then I'll just sit on the stuff until it stabilizes.

Like others, I tend to list my items at the current low price, or if none are on sale, close to the last price that it sold for, marked up a little bit. I took advantage of Intelligence potions for the BLM burn parties and made enough money to cover the investment of materials off my initial sales. Then some guy kept undercutting me. My price dropped gradually from 25k to 10k per potion (which was already high since they were only hi-potions) since I was willing to keep going lower since my initial investment was already recovered.