Most of my items go large letter for $1.40, which is added into the cost of the item. All the parcel rate items go as small parcel rate of $7.20. I have $8 on those and so far have not had any issues.

My husband bid on and won an item the other night. It was a pick up item from interstate, but she had mentioned in the listing that she was happy to post, just email for a quote. He did that and the quote came back as $10.75 including SOD. When he actually won the item and she sent an invoice, I was expecting the postage cost to have increased because I KNOW it would have cost more than that to post even without SOD.

Nope, invoice said the same thing. I sent her a message and said that I don't think she was charging enough postage and I didn't want to see her out of pocket , did she want to send a revised invoice, and never heard back, so I paid for it. The item was won for $10.50. She charged $10.75 for postage including SOD, actual postage was $16.75, plus whatever SOD costs. 

I worked it out that by the time she lost big time on the postage, then paid eBay and PP's fees, she had made nothing from this item and was more than likely in the red for her efforts. I'm just waiting for a buyer to pay for something and as soon as they do, I'll send her the difference in the postage. I know I don't have to, she made the error, but she's far from being an experienced seller (i think it was only the 2nd or 3rd thing she's sold) and I feel bad for her.