I'm assuming the reader knows little or nothing about playing the auction and will build from there with a series of articles. This first post introduces several key concepts that aren't necessarily obvious to new auctioneers.
Undercutting is posting an item for less than it's lowest price was before you posted. Many players will insist you should only undercut by 1c because that keeps prices high so we all make more and may become abusive if you don't do what they want. However 1c undercuts generally don't work very well unless you're a camper. Most likely the real reason he wants you to undercut by 1c is that he is a camper who will cancel and repost his auctions 1c under your's the minute you leave the auction.
Campers vs normal players vs bulk sellers
Campers are online a lot and pretty much always at the auction house. They are the lowest form of life in the game, especially the ones that bot. Campers cancel and repost everything they sell within minutes after anyone undercuts them. Normal players tend to post their stuff and leave the auction. Campers always undercut by 1c (maximizing profit per item), Normal players will often undercut by large amounts trying to sell their items in spite of campers. Campers attempt to dominate sales, control markets and force competitors out of business by preventing them from selling anything
Buy low and sell normal
A common misconception is that you should buy low and sell high. While buying low is of course always good selling high really only works if you're a camper continuously cancelling and reposting your items as fast as they get undercut. Non campers are usually better off selling at normal prices. It's better to sell 5 a day for 10g profit each than 1 a month for 100g profit.
Morning and evening prices
Prices follow many different cycles. There are daily cycles, weekly cycles, patch cycles and so on. One of the more important cycles that many players do not realize exists is the difference between morning and evening prices. Prices are almost always lower in the mornings than in the evenings and the difference can be huge at times. If herbs cost 20g per stack in the morning 100g per stack in the evening and you buy your herbs off the auction in the evening you won't be able to compete with that camper who's online 24/7 on flask prices.
But I farmed the mats myself so they're free. No that's a fallacy, the mats weren't free, at the very least they cost you time and the opportunity to do something better / more profitable / more fun with your time. If you could have sold the mats for 100g but instead used them to craft an item that never sells for more than 10g, then crafting that item cost you the opportunity to make an additional 90g.