The most important aspect of placing a price tag on an item is the perceived value you are creating. A consumer doesn't always want a low price as this can indicate an inferior product. They view a price as an indication of craftsmanship and by buying a handmade item such as one of my cards, the buyer has a sense of good taste, status and confidence in the seller.
However, a buyer can tell if something is overpriced. Similarly, not all buyers will take into consideration the time taken to make something and they may compare it to a machine made item. This would be like someone comparing one of my cards with a mass produced card you'd find in Clintons or Hallmark and to me, they are not comparable.
Many new sellers, including myself in the beginning, misunderstand price and undersell themselves at bargain prices because they feel guilty about making a profit margin or they are just so excited to get those first sales.
Ultimately, the value you place on an item should wattant the price tag you use!
Coming over the next few business tips blogs will will look more into pricing so make sure you come back!