Most eBay buyers HATE Reserves because they don't know what the Reserve price is and could end up wasting their time bidding all week, be the highest bidder and still not win the auction.
When someone is the highest bidder on your eBay listing (with No Reserve), they have a picture in their mind of them winning the auction. They already mentally OWN your product. The last thing they want is someone to out-bid them. So they are more likely to keep bidding up the price of your auction which will lead to your item eventually selling for a higher price ... which means more profit for you!
But if your eBay listing has a Reserve and they bid on your item and see "reserve not yet met" next to their bid, then they don't mentally own your product and may start looking elsewhere for whatever it is you are selling. They may then place a bid on a competitor's listing, be the highest bidder, start to mentally own your competitor's item, keep increasing their bid whenever someone out-bids them and eventually buy your competitor's item for more than your Reserve!
Adding a Reserve also increases your listing fees.
You can research eBay's completed listings to see what price your item tends to sell for on eBay. (You have to be logged in to your account to filter eBay's search results to just show the completed listings).
If you find that your item tends to sell for less than your Reserve price, then it is unlikely that your item will get any bids if you list it on eBay with a Reserve - so there is no point listing your item!
If you find that your item tends to sell for more than your Reserve price - then there is no need to apply a Reserve when you list your item on eBay!
If you feel that you MUST use a Reserve, then set it as low as possible - just enough to cover your costs. But it would be better to set your starting bid at the price that you would use as a Reserve and avoid using a Reserve altogether.
You could mention the full retail price of the product in your listing (assuming it is higher than your starting bid) so bidders know they can still get a bargain.
But if the reason that you want to use a Reserve (or, better still, use a high starting bid) is because there isn't much demand for your product, then you should get a different product that IS in demand!
Martyn Boaden is the Founder of The Online Auction Resource Centre where you will find more information and all the resources you'll ever need to set up and run your successful and profitable eBay business. And for a limited time only you can get instant access to his popular eBay Business Box (worth $164 + $17 pm) for FREE by clicking this link: http://www.TheOnlineAuctionResourceCentre.com