When I look at the higher-priced works on this site, most of the artists seem to be further along in their careers- they are involved with galleries, hold workshops, etc and can justify those prices. I am not there yet, thus I don't feel right charging those prices. I'm only 21, still studying for my degree, just starting out. My paintings are small, and usually only take three hours maximum. I wouldn't post something here unless I felt proud of it, but I don't want to overstep into arrogance and ask too much.
From a business point of view, selling one 6x6" painting at $20 per month covers the cost of DPW membership. I've done that every month so far. The cost of materials is kept low by buying canvas boards in bulk, and paint when it's on sale- I factor that into the cost of the painting. So I'm not making a loss. After selling more than expected for the first few months of this year, I'm able to afford a table at the local arts and crafts fair in summer, and I might try entering DPW's monthly competition. And restocking materials is easy enough to afford. That's pretty good going for a beginner.
No, I am not able to support myself on art- I hope one day I'll get there. But I have a long way to go... Basically, what @dkuhn_art said about hard work and time. I avoid $1 auctions because that wouldn't cover the cost of the canvas board and paint, though.
I also think we may not be giving buyers enough credit- most people realise that they will have to pay more for the work of a well established artist, for a larger work, etc. Surely they are intelligent enough to understand the varying prices, and if they really love a work they're not going to refuse to buy it because something else the same size is selling for $10 less...?
To my fellow UK artists, I don't know any other auction based sites, but have you come across Art2Arts? Based in Portsmouth, juried entry, and higher comission costs, but if you have larger works you want to sell, it might be a good complement to DPW. I'm planning to apply either late this year, or early next.