My Opinion, and others will legitimately disagree:

If you have high dollar chips, and likely no one will be buying more than one, maybe 2 at a time, Build free shipping into the price . Expect to pay $1.98 to buy a shipping label from eBay/PayPal. (Use a 000 Bubble Mailer, if you need to price in the cost of buying those...) But as eBay takes money off the top, figure $2.25 to net that $1.98. Buying the postage label on eBay/PayPal gives you a discount to the Post Office price at the counter, and has $50 of built in insurance (I think, I haven't read the info on the shipping page in a while).

If you have low dollar chips, no free shipping. I'm currently at 1.25 shipping for the first chip and 25 cents for each additional chip. In my opinion, this will get folks to make multiple purchases from you on the same order, as they don't feel that they're being overcharged for "free" shipping that would have to be built into the price of every chip that might get sold individually. Then I ship in a #10 envelope, with the price at the self serve machine at the post office, being .49 for the first ounce and .21 for each additional ounce, + .21 for Non-Machineable surcharge if the envelope will not bend easily with the chips properly packaged in it. (One chip will usually do OK without the surcharge, but two chips will likely need more packaging that makes paying the surcharge a good idea. If they buy 4 or more chips, you're back to a 000 bubble mailer, and you will have collected $2.00 that will just about cover the $1.98 it costs to post it.

Steve