The Brian Henderson entity posted thusly:

The handling fee should be part of the purchase price. You don't go
to a store and get charged a handling fee, do you? After all, they
have to pay someone to put the product on the shelf, don't they? They
have to pay someone to ring up your purchase and put it in the bag?
Should they charge you a packaging fee too?

A few years back, I bid successfully on a tele-extender for a camera.
The bidding started at $1.00, with free shipping. I bid $15, but since
nobody else bid, I got it for $1.00.

Well, I felt a bit bad about it, as the fellow had obviously thought
it was going to go high enough to pay for his free shipping. I ended
up sending him $10.00

My point in this is that there really are a few ways to do it.

1. bidding starts at $1, shipping set at $5, handling set at $2
2. bidding starts at $3, shipping set at $5, no handling charge
3. bidding starts at $8, no shipping charge, no handling charge

Is there any difference to the buyer here? #1 ensures the seller will
recoup his expenses, without having to set a reserve. I look at the
entire package when I decide what to bid, and I don't much care
whether the cost is listed in column A or column B.

I tend not to bid on items that have all the cost in the shipping and
handling, but that's because it usually means that the overall price
is too high. To me, that's a regular sale, not an auction, and I
resent paying more for it than the current market stipulates through
the bidding process.