Hi Will UK, great thoughts on both issues. After selling on an online auction for 12 years, tho' I am pretty certain that 98% or more of my business will come from the US. It has been that way every year with a few more overseas customers when exchange rates are more favorable. If that changed, I would consider changing policy.
In my field most sites have paid shipping rates similar to what mine used to be, and a few have pretty hefty rates that I would be uncomfortable charging.
I have had issues with folks dropping items from the cart, which I know is a widespread issue. But the shipping the way it is ~ in theory ~ doubles the shipping when a second item is added. I would not charge the second additional rate on my lightweight items. Even tho' the customer is told this, they most likely don't the take time to read it, don't want to bother to wait for refund or its a trust issue.
Either way, I have decided to simplify with Free US Shipping rather than charge a flat rate per item. Being 'new' it might give me a slight edge in a very competitive field.
That, plus good pricing and better product should go a long way.

I LOVE your suggestions on the freebies, very good ideas here that everyone can take advantage of. I agree, its not always the value. I offered a tip sheet years ago and the customers just loved it. Thanks to your suggestion, this is something I will use again, and I will consider what else I might add to that realm over time.

Norma

The way that we have our shop set up (keep in mind I have only been using SCC for a couple of months and may be using it wrong) is to leave my default shipping as $0 across the board. I then use the shipping options below to specify shipping speed. For example, my three options are:

Standard (3-5 day delivery) - $0. This is our basic free shipping and will generally go out using First Class mail to the U.S.
Expedited (2-3 day delivery) - $5. Five bucks will generally cover any expenses for USPS Priority Mail, especially using flat rate bubble envelopes or small boxes under a pound.
Overnight (1 day delivery) - $20. A flat rate USPS Express mail envelope runs $18.95 right now.

I've made sure that the check box to require users to select an option is filled so customers can decide whether they want free slow shipping or spend a few bucks to get it faster. Keep in mind that my shop sells hand-made jewelry along with other generally lightweight items, and we only ship within the U.S. But from what I've seen so far, this seems to work well and leaves the choice up to the customer.

Just my two cents

Jeff

http://shop.craftysmiths.com