Most of the time, an ebay buyer will see your auction as 'item price' + 'postage price' = 'total price'. By keeping packing costs down you can keep your total price low, and attract more buyers!
Re-cycle whenever possible
As well as being good for the environment, recycling old jiffy bags and bubble wrap that people have sent items to you in can save you a lot of money in the long run! Obvisouly I don't mean to sellotape together loads of small pieces of bubble wrap to send a book, but, for example, if someone was to send you a book with a whole roll of bubble wrap on it, unwrap it carefully and re-use it! You can then knock a bit off your p&p charge as you won't need to go out and buy bubble wrap, and this will attract more buyers as you'll have a lower total item cost!
Shop around for the cheapest packaging materials
By shopping around you can usually find the best deals and save a fair bit on your packaging! As a rough example, a Post Office near me sells A4 Jiffy bags for £1.25 each. In my local pound shop you can buy a pack of 5 A4 Jiffy bags for £1!! That's a saving of £5.25!!! The Post Office also sells 3 metre rolls of parcel tape for £2.49 or in Ikea you can buy a 10 metre roll for 70p!!
Use free packing materials
A few people on a moneysaving forum I regularly use have also suggested picking up boxes from supermarkets to pack items, and even to take the bubble wrap from the grocery section to wrap items! Another thing that most people don't know is that you can get free Special Delivery bags from the Royal Mail. You can either phone them up and ask for them to be sent to you or pick them up from your local sorting office. Obviously they are only for Special Delivery but you can always turn them inside out and use them as ordinary packing bags!!
I hope these tips are helpful and that they help you to save some cash!! :o)