I haven't read through this thread yet (just the first 2 pages).

I'm a buyer, used to sell many years ago, but a buyer now.

I had an entertaining moment reading feedback for that seller, after looking up the item number you supplied. Others have the same thoughts as you, All earrings on the card are either broken or bent beyond repair. However at a cost $1.99 and with postage stamps of $2.40 on the envelope, I'm just not sure what you hope to achieve? Building negative feedback perhaps.

That appears to be another buyer unless it is you under a different account.

Ebay can't monitor every ad and these are listed as free postage Ebay would have no idea of how much the product cost in the first place or what the seller was paying for postage. They don't care. That's not their job. Their job is just to host ads and monitor for scammers & the cheap seller isn't one of those.

Ebay encourages people to start auctions at 99c, put it that way, so they don't care if sellers aren't making a profit. Only that fees are paid.

There are ways you can still sell though.

1. try to have stock that is not identical to those who are listing cheap stuff from China.

2. And this worked on me as a buyer, to pay substantially more than the chinese listings that looked the same. You need to explain the points of difference.  Some years ago, I was after an item and the Australian ad said theirs was much better quality than similar items shown in Chinese ads.  Now we're not talking a big item, it was a diamante product for card making. The seller explained hers were well made, wouldn't lose the diamantes and had a superior sparkle etc

I bought them and they were lovely. 

What you need to do with jewellery is push the quality. Be blunt as in say eg-these won't go black the way the cheaper products do.

Or say cheaper products often have posts that bend and break, whereas yours are stronger.

But only if it is true.

If yours are identical in every way to the cheaper items, then you can't compete, find a better, different range of items.

People will pay for better quality. Not everyone on ebay is after $1.99 earrings.