While I agree that your costs of supplies, etc. can reasonably be covered as part of the shipping charge, eBay and PayPal fees should not. Since both eBay and PayPal charge their fee depending upon the final selling price, by lumping it into a shipping fee you stand to make extra profit if the item doesn't sell as high as you'd like it to. Now, before the table is turned and someone points out that if it goes higher than expected and that the handling fee wouldn't cover the costs - remember, you're getting MORE than expected on the bid anyhow! Either way puts the buyer at a disadvantage.

I suggest everyone take a look at this common-sense thread on eBay since 2001:
http://forums.ebay.com/db1/thread.jsp?forum=96&thread=34075&modified=1099844091693

While some sellers will have policies different that what's outlined in the post (many that are more customer-service oriented) I think this post is an excellent primer regarding shipping/handling.