Here's an accounting concept that 99% of the population is not aware of.

Buyers expect that you should charge only the price of postage for the items you send. 

In an eBay business you have the price of the envelopes and boxes, packing materials, bubblewrap, foam, shipping tape for the boxes (shipping tape is expensive), box cutters if you are selling larger items, and your labor for packing.... sometimes even wrestling with the boxes...plus the gasoline to the post office or shipping company.

A business that ships a physical product has to cover all of these expenses to stay afloat financially.

Our eBay store has over 5,000 rare movies for sale and the materials and labor required to move these items across land and sea in one piece, unfortunately costs money. 

We charge a fair handling rate, but there will be buyers who'll ask "Why is your shipping so high?  The postage cost is only..."

You can prevent a lot of these misunderstandings about the expense of shipping by mentioning in the shipping instructions box of the listing that says "Shipping & handling covers postage, envelopes/boxes, packing materials and gasoline to the post office/shipping company."

If you ship larger items, like antiques or furniture, put a big statement at the top of your item's description: SHIPPING & HANDLING WILL RANGE FROM $25 - $45 DEPENDING ON YOUR ZIP CODE DISTANCE FROM US.  PLEASE EMAIL FOR A SHIPPING & HANDLING QUOTE TO YOUR ZIP CODE BEFORE BIDDING ON THIS ITEM." 

This gives you the opportunity to contact FedEx or DHL and calculate what the postage will  plus add up the shipping materials costs.  Then you can tell prospective what they are going to be required to pay buyer before there is a misunderstanding.

I can't count how often this has saved some prospective buyers from the misunderstanding that we can package and ship a 35lb - 80 lb antique and protect it in transport FOR ONLY POSTAGE PRICE OF THE SHIPPING.

It's true that many buyers have chosen not to buy some our items, but it was fair to for them as well as us. 

Situations can get real nasty if a new eBay user suddenly realizes that it will cost him/her $45 above the sale price to ship their item.

Consider this: Let's say you're just starting your first business - presumably right here on eBay.  You might mistakenly think you're making a profit when you look at your eBay Selling Manager Pro Accounting Screen and see all the nice gains you've made above the cost you paid for the products. BUT WAIT!  You later realize at tax time that all the gain you've made from "upselling" your items is negated by the costs you paid throught the year for packing materials and gasoline. This is commonly referred to as OVERHEAD.  Many beginning entrepeneurs do not really take it into consideration.

The only time you shouldn't charge a handling fee is when you are selling a digitally delivered item like an eBook, which we also sell too.  eBooks and or online services like website developing should of course be free of shipping or handling charges.

With DVD's and CD's and other media items, you could conceivably include the cost of the shipping and handling within the listing price on eBay and  call it "FREE SHIPPING",  but THERE IS NO SUCH THING AS FREE SHIPPING.

Even if a buyer picks an item up at your location, THEY ARE STILL PAYING A HANDLING FEE BY USING THE GASOLINE TO GET TO YOUR HOUSE. If you deliver the product to their doorstep you would be spending your gasoline.

There's no such thing as "free shipping", and we try not to use that false concept on ebay.

You'll find that even though buyers say they don't like "handling charges", they rarely buy your product if the postage and handling is included in the price of the item - called FREE SHIPPING.

It's unfortunate that schools teach nothing to the public about basic business practices or the basic operating costs therof. They make kids learn Geometry and Algebra, but they don't teach about the most basic principles of how a business must operate to cover the costs of shipping. 

Tell your buyers in the listings about your handling charges... you and they will be happier in the end.