I get the sellers thinking, as explained above, but buyers tend to view things rather differently. The normal rationale behind listing a nice item at a very low start price is to generate maximum interest from bidders, that gets some momentum into the auction. If items are accurately and comprehensively listed with no reserve on a long duration auction, 7 or 10 days, the finishing bid really is the market price of the item. Punters have had plenty of time to find, watch, research, and form their own personal valuation opinion of the item. and decide what they are willing to pay.
Personally I don't like participating in low start reserve auctions. why should I waste my time having to do multiple small incremental bids in order to try and second guess the seller's bottom line? As far as I'm concerned the minimum price for anything the seller is willing to accept should be the start price, and no playing silly buggers with a low start price the seller won't honour because they've set a higher reserve.
The auction we're talking about is a case in point. The market decided the item is worth £56, after several days bidding. Well, like it or not that is the market price. I suspect the final price was actually depressed by the presence of a reserve, and would probably have exceeded the £100 mark if bidders knew their winning bid would be honoured regardless of what it was.
Sellers seem to want their cake and eat it. They want the upside of the auction format where a silly bid war may inflate the price, but they don't want to take a chance that the item doesn't generate much interest and finishes low.