Romulus Augustulus was not the last western Roman Emperor. He was a usurper. The legitimate emperor, Julius Nepos, was alive and well in Dalmatia on the other side of the Adriatic. After Romulus Augustulus was deposed, Odoacer reluctantly accepted him as emperor (pressured by the eastern emperor), and struck coins bearing the image of Julius Nepos.
Nepos was assassinated by his generals a few years later (Odoacer may have even had a hand in this via Glycerius), allowing Odoacer to annex Dalmatia after a short fight.
Throughout his short reign, Odoacer relied heavily on the co-operation of the Roman Senate, appointing influetial senators in key positions and having, for the first time since the 3rd century, coins minted with the S(enatus) C(onsulto) legend. If he had declared himself emperor, the Romans (both nobility and commoners) would have probably stabbed him in the back at the first possible chance.