Shasta says "2. Option two I thought would solve everything. I use my own packaging so I included the cost of the oz. rate for USPS shipping in the package fee."
If you put the ounce shipping rate in your package fee that is added IN addition to the fee calculated for the item. So basically you're getting double shipping.
You don't want to put the shipping cost in your package fee,
This fee is for supplies, mailers. tape etc.
I sell a lot of items in both shops that weigh 2 to 5 oz.
And I can get multiples to work out exactly right.
This is what I do.
If I have a dog belly band that weighs with a mailer 2 oz, but 2 in a mailer only weighs 3 oz. I ONLY put 1.5 oz in my listing for the weight.
That way, 2 are calculated on 3 oz. NOT 4 oz.
On other sizes that weigh 2.2 oz with a mailer and 2 will weigh just under 4 oz with a mailer, I put 1.75 oz for the weight instead.
That way, 2 will calculate at 3.5 oz and the 4 oz rate.
It won't matter on that single item if I put 1.5, 2 or 3 since all those first class rates are the same.
I do the same on items weighing 4 or 5 oz with a mailer.
I put slightly less for that 1 item. Like for the 4 oz item I'll put 3.25, 3.5 or 3.75 oz. depending what I need to get multiples to come out right.
It won't matter on 1 item if I put 3.5 oz or 4 oz. both are calculated on the 4 oz rate.
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Also if you're getting $11 to ship 2 cards I suspect this has to do with your mailer size if you have these in Package preferences.
CS is figuring on 2 packages, seems like a Priority price NOT a first class.
If you have mailer sizes listed, you need to put more than 1".
Same with the Priority flat rate envelopes, you need to put more than 1" for the height.
If you can get 5 cards in one of them you need to put 5".
CS does not read fractions less than 1" in your listing. So if you have .5 for the item height, CS is calculating on 1".