Can someone tell me how the postage works with Sellers

On several occasions I have paid postage of A$6.95 or more, only to find when I have received my item, it has two 60 cent stamps on it.  Therefore are Sellers allowed to charge what they like?  I don't believe that it is right to charge A$6.95 or more, when it has only cost the Seller A$1.20!

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