artists_beware | What US shipping service would you recommend for small items?

Hi there! I've recently made the jump to selling small polymer clay items on Etsy, but so far I've had to shell out $5.75 per box for flat rate priority mail shipping (I picked it because it comes with insurance and tracking). Since my items are only $10, I feel like raising shipping to flat-rate price would deter customers.

My questions to folks who sell similar items are:

1. What service do you use, and what does it cost?

2. Are both insurance and tracking an option for it?

In the meantime I'll be researching this myself, but I wanted to get more experienced artists' opinions on this as well.

Thanks!

Edit: Thank you for the replies!

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I've actually run into a similar issue when sending out my packages. I make small, hand sewn plushies and started out at around 10$, but came to find that shipping them out was costing me half of my commission income.
I ended up raising my prices slightly to compensate, but it seems to have sent my business into a slump. Haven't had a commission for almost half a year now. :T
I don't go through a third-party selling site though, I advertise on DA and my Tumblr and take payments directly through Paypal.
So I'm also kind of curious if there's a better (cheaper) way.

What US shipping service would you recommend for small items?

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