As others have suggested open an Business acc with Aust Post and with volumes comes discount for your postage. 

Based on your sales, you should qulify pretty easily.  it's free.

Worth it.

The weight has actually been changed some time ago and the upper limit is 5kg not 500g anymore.  If it fits into a small prepaid satchel it is supposed to take up to 5kg.

How have you sold 6,700 items and this only occurring to you now.

You could be saving heaps of money and getting some discounts with an AusPost account

What you have to do is not rely on eBay to do your thinking for you.

I quote the actual item weight, not a blanket, eg 500g. Funny how attention to detail fruits.

Using AP packaging anything that fits in a small satchel and is under 5kg goes for $9.70. However if your items are over 500g and you select own packaging then eBay is correct. As is AP, where eBay get their pricing from.

I would suggest NOT using eBay calculated postage if you are using AP postage, and use flat rate. The prices generally only go up annually and bulk editing will take about a minute. Annually.

Based on my experience with the last price rise where it took about a minute and a half to bulk edit postage on 1700 items.

If your items are 500g and you insist on using eBay calculations, then, yes, change your weights to 499g. Assuming you are happy to get pinged for excess weight if AP check your items. Noting that AP charges for total weight, packed.