How Do Sellers Make Money Selling <$1 Coins?

Depends. One reason is to build a reputation quickly, get your star count up. Some sassy collectors dont even look at your listings unless you have a gazillion. When I started a few months ago, had 8...by selling some individual coins at $2.00, after fees and a stamp I clear over $1, coin cost me $.50, that's a 100% profit margin. Do that 50 times, increases your hopefully happy customer base, increase your ebay rating(stars) and make a little profit to boot. True, big bucks is made on items that have the value. Most of those coins you saw were most likely low cost coins (to seller) say cents and nickels, even so called "error" coins.qq

The other reason, ....space, the final frontier...upstairs that is. Just not sales savvy at all. Although, I have found, that it's don't sell unless your price is lower than you'd like it to be, something for nothing attitude is prevalent.

If I take a coin I paid $0.10 for, sell it on ebay for $1 plus $1 shipping, put it in an envelope with a $0.49 stamp, I'm profiting even with ebay and PayPal fees. It's not much but, if you do that 1000 times, recognizable profit can be realized. And, as mentioned, you increase your feedback (if the buyer happens to bother leaving it )

The question is more about volume of sales on that level. It's not worth it for the average seller but can be profitable if you have thousands of coins to offload.

Also, if the seller has multiple auctions starting at very little, they can eat the loss if only a few sell for the low price. It establishes a reputation that the the prices are fair.