I travel around Etsy and Etsy forums and stumble across the subject quite often.
There appear to be quite a few formulas to use to calculate that perfect price. Apparently, having one is supposed to make you a successful businessman (or woman :).
What do you think your product is worth?
If you, being after all quite intimately acquainted with your product, think it is not worth much, how do you expect strangers to value it higher?
Saying I really like to repeat - cheap is not great value, cheap is just cheap.
As a customer, I feel offended by most of marketing tricks used to try and get me to buy. When I see a 9.99 price I feel someone is trying to play games with my brain and immediately steer away. When I see free shipping, I'm aware that price of the actual product went up by those few bucks to cover this missing shipping cost.
The very basic thing marketing trends are trying to make us forget is - sellers are not beneficients of humanity, they are out there to earn money.
If something appears to be free, it means that you are going to pay for it some other way.
If something appears to be extra cheap, it means that supplies were extra cheap and labour was extra cheap. Usually that compromises quality VERY much.
If something appears to be a miracle and have all of the above not applicable, but still being extra cheap, it means that there's something you do not know.
These are the rules I'm reminding myself of when shopping. When selling my own stuff, I assume that my customers are at least a bit like me and I don't offend them by treating them like brainless dummies and promising free miracles.
Skillfully and time-consumingly crafted items cost. It's worth it.