In the postage section, next to Add postage details, will be a link to the right that says "Add or remove options".
Click that to bring up a window with some more options, make sure "Show local pick-up" is ticked, then save. Then, when you go to select a postage service in the dropdown menu, No Postage, local pick-up only will be an available option.
If you have the business policies on your account, then you will need to click 'Create new policy' in the postage section to set up all the options, then save. You will then be able to select that policy from the dropdown menu for any future listings where you only want to offer pick-up.
