I've also wondered if the budget content writers make any money here. I have to imagine most are spinning content because for $5, even if it took 30 mins to do some cursory search and write a quick article, the seller would lose money. If you are thinking of catering to buyers who have high income-earning sites, then charging more for high-quality work would make sense. You might not get that much work, but maybe you could diversify by offering multiple services. For example, I recently spoke with a writer who bought a lifetime press release licence from one of the larger services (I won't mention the name). He was able to leverage that into his article writing business by including the extra service (providing a press release) with every sale. Moreover, he also included a money-back guarantee and the next article free if the buyer found a grammatical error in his work.
Buyers want some assurance of quality because they rarely buy writing services in advance. That is to say, when they need an article it is because they have envisioned a particular update, and they work toward achieving their goal immediately. For this reason, services must be timely. But how timely? Speaking only for myself, I would be less interested in buying from a service that offers a 48 hour turn-around (or less) and more interested in knowing the writer had enough time to actually write original content, and edit that content. A week seems reasonable. Beyond that and customers might get antsy.
What do I mean about editing time? If you write an article and send it immediately to the customer, so you can move on to the next job, you really had no opportunity to gain a reader's-perspective. It's better to write an article, set it aside for a while, and then come back with fresh eyes. Reading the article you wrote, and evaluating it with a little distance (from the eyes of a reader) is the only way to assure your content is as good as it could be. Anyone can puke out words and send them out, but a professional writer includes some time for editing and reflection before allowing their work to be sent anywhere. Rewrites are expected, and even necessary, regardless of the size of an article. In fact, the smaller the article the more effort it may take. The writer must ask himself/herself, did I use every word productively? Did the buyer really get their money's worth? Is there any filler? Any repeating? How unique is this article? Can I do it better?
On my view, if you really want to get into this type of service, you might consider how you can distinguish yourself from the pack. Don't try to be the cheapest. Instead, strive to be the best value (ensuring the buyer receives a level of service they could not get elsewhere). It's better to have a few good paying customers than to have droves of budget customers. Low-cost services simply ensures you cut corners, work yourself to death writing things you can't genuinely be proud of, and earn the same rate at the end of the day.
So, there's my two cents. Everyone has a different idea of business. My approach is to charge a little more and do a better job. I wish you the very best luck in your new venture.
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