In my real business I charge a flat rate of $5 shipping. (mind you, everything goes out UPS ground in a box)

Some of my customer like that because I charge LESS than most other distributors.

For eBay if I'm not running a free shipping aucton, I charge $2.00 and 50c a chip after that.

No one cares if I drive to the post office, drop it in a box on the street or ride a donkey. No one cares if I paid 13c for a mailer or $1.25 for a bubble pack from the USPS.

Two Bucks is fair

Small correction, postage starts at 49c for a bubble mailer. I've gotten and sent 2 oz packages with 60c and never a postage due. (should be 72c) People have sent me chips with 37c, never a postage due. I think the post office doesn't care or doesn't know it's own rules.

Breaking even on postage and shipping costs isn't the problem. It's when some people make shipping their profit source. Such as some people who try to charge $6 to ship a casino chip. Or won't combine shipping, even though they pack all the chips in one package.