Selling Items on the Auction House

The Auction House (AH) is a brilliant way of making money if you know the tricks on how to do it. The basic strategy with the AH is to buy things cheap, re-list them on the AH, and then sell them for a profit. Even better, of course, is to get good Items from drops and then sell them on the Auction House for pure profit. Many players generate most or all of their cashflow simply by speculating on the AH. So a good understanding of the AH, as well as some time to invest, is essential to turning it into a money-making proposition for you. It is also highly recommended that you get the Auctioneer addon (as mentioned above).

One piece of advice that players should follow before starting new WoW characters is to choose the proper server. Lower population servers generally have lower prices in the AH, and less demand for items. This is good news if you already have enough money, as things are cheaper, but for poorer players (with gathering skills), a more populated server will garner you more money for what you gather and sell.

Tips on using the AH:

Know the price of your items and how much they are worth; make sure you check this as the more accurate the price, the more sales you will get. Auctioneer can help with this. (Auctioneer can also get a very wrong ballpark price on some occasions, so you are going to have to use your own savvy for a reality check.)
Always post a closeout price on your auctions. Don't think that "They'll just bid it up anyway." Many players will not bid on an auction with no closeout unless the item is heavily discounted. Then you may get a bidding war, but the time between bids is long enough, it usually sells for a fraction of what it could have gotten. If two interested players are both in the auction house at the same time you may get a faster bidding war. That doesn't work either. I have gotten in bidding wars with other players and if I want an item and get overbid in quick succession, I leave and come back later, before the auction ends. Less overbidding. It will still end up selling at a bargain price, whoever gets it. ... Or just keep on doing what you are doing. I like your bargains. I just bought a blacksmith recipe for shield spikes for under 20 silver, because while the demand was very high, the turn-around on bid notifications was slow enough that it only went up to 'under 20 silver' from the opening price in a 48 hour auction. (remember, the increments per overbid bid are small) I sold it for 8 gold in less than two hours. The main difference is that I had a realistic starting price and I posted a buyout price. You will have more sales at a higher price and get your money more quickly if you post a proper closeout price.
When selling, make sure that you are not pricing way above the others; the best bet is to aim higher if you know it will sell before it expires, or at the same price or lower if there is lots of competition.
Don't gouge your customers. You can make plenty of money on the AH without charging exorbitant prices. Demand is price sensitive, and people tend to have a good feel for what an item is really worth. If your items always come back, you are probably charging too much.
Be aware of the seasonality of items. When the Darkmoon Faire is in season, Darkmoon cards and decks (Furies, Elementals, Lunacy, etc.) tend to sell well, but prices also tend to get depressed. When the Faire leaves, prices return to normal, but sales volume decreases. The same is true of things like Snowman kits, Red Holiday wear, etc. Holding onto that Snowman kit for a few months, and then listing it in July, can net you a significant profit.
Be patient. If you are trying to sell an item for a large amount of money you might have to post it for several days in a row, or post it then wait a week and post it again.
Be aware that the listing costs of items are very important. For instance, Armor and (especially) Weapons have high listing costs, meaning that if you're going to buy them on speculation, you had better be darned sure they will sell within a few listings, or the listing cost will destroy your profit margin.
Recipes, plans, etc. have lower listing costs, making listing them over and over again less painful.
Be cold-blooded about admitting that you've taken a bath on an item. If you bought that sword for 5g, listed it for 10g, and the listing cost is 2g50s each time, after two times it had better sell just to break even. Once you hit that point, don't keep listing it over and over in desperation trying to make something off the AH. D/E it, or vendor it, and move on. Lesson learned. Don't get trapped in the fallacy of sunk costs.
Some of the best things that can be sold in the auction house are special items or "Pets" that can only be found in certain areas. For example, the Savory Deviate Delight recipe can only be found in Horde areas, and for this reason sells really really well on the Alliance AHs.
If you have Auctioneer, run it for several weeks before beginning to speculate. That will give you a well-populated database to work with, which will have enough historical data to make reasonable purchasing decisions.
Likewise, Auctioneer users should always check the Bid % of an item before buying it on speculation for resale. The Bid % is an indication of how often this particular item gets bid on. If the bid % = 0% (i.e. no one is bidding on this item), that means that the item probably won't sell. In most circumstances, before you buy an item on speculation, you want to make sure that is has a minimum Bid % of at least 4%, and closer to 10% is better.
Keep track of the median disenchant value of the items you are selling. In some cases, if an item doesn't sell after a listing or two, simply D/E'ing may be more profitable than trying to sell the item at fire-sale prices just to get rid of it.
Speaking of disenchanting, check the market situation on your server. If it is a long-running server, enchanting materials such as Strange Dust and Magic Essences may well be very expensive (for example, a typical price of 50 or more for one Lesser Magic Essence is a strong sign that your realm has a healthy enchanting market. Likewise, be suspicious of players asking for high level enchants on the public chat channels, as usually this means the server has a high demand for enchanting materials). If this is true, consider getting Enchanting as your second profession in this case -- mainly to disenchant anything you find and sell the materials you get from it. This has the second major advantage of being able to turn useless quests rewards (which are soulbound) into a lot of gold right from the beginning. You can also disenchant any old gear you're not using anymore, instead of having to vendor it.
Likewise, if you use a dedicated character (such as a bank 'toon) that does nothing but work the Auction House, have him/her pick up enchanting, so this character can disenchant low-level items.
Don't put all your eggs in one basket. It's a lot better to spend your working capital on buying forty items for auction, each with the potential for profit, than to take all your working capital and invest it in that one purple leatherworking recipe that you hope will make you several hundred gold. If that puppy doesn't sell, or doesn't sell for what you want, you've just wasted all your working money, and deprived yourself of a lot of flexibility. Leave speculating on purple items until you have a few thousand gold squirreled away.