But I undercut fairly often. It's because I find I'm often getting undercut by a mass of 1 gil less sellers. So I drop the price by 5, 10 or 50 gil depending on if I can still make a profit. If the market for the stuff in question gets saturated and the profit I can make is too low, I just pull it from the market for a while.

Also, I quit bothering trying to sell items that sell for less than 10 gil all the time. Even if the items are things that I got for free (drops, etc). Items like that don't move because everyone is trying to get rid of them. So I just discard them.

Working the market is an art. Sometimes you have to move to new areas of it for a while. When I undercut I'm just trying to get something to me quickly and also test the demand. If the demand is high it will sell fast and I'll know I can price it higher.

Just my thoughts...