I price my stuff off the USPS flat rate. For items that are really light weight (mug fobs, etc.) I post them as shipping free with any other purchase. I really do trust USPS, they handle millions, if not billions of packages a day and have never burned me, unlike FEDEX or UPS. I've even shipped 15 pounds of steel cross-country in a flat rate box, and it came in without a problem and in one piece.
If you are really concerned about shipping your smaller stuff and gouging your customers on the shipping, look into the padded envelopes as an alternative to the flat-rate boxes.