The first thing I do when searching for stuff to buy on ebay is to sort it by Price+Postage. The Free Shipping thingie was cooked up by the dark souls at ebay so that when there is a dispute there is no dispute who gets ripped off for the original postage --> the seller.

Keep in mind that Free Shipping (plus 30 day money back return and Express Post) gives you a Premium Service badge if you are a Top Rated Seller which will rank your listings higher in Best Match searches. No doubt a lot of people are using Best Match, so I guess Premium Service gets you more customers.

Having said that, I am listing more and more of my items with postage nowadays because I just don't like this Free Shipping thing. It is not free and it is insulting the buyers' intelligence. I use it for some items but most of my items are listed with postage now.