Correct, that's a 20% discount, it actually helps and it's pretty good too. They will suggest a default size and weight based on the product, if you thing you will stay within that size and weight you can go with that OR you can customize, change size dimension weight etc, add signature, insurance, everything. Basically you get all the options that you get on USPS site, all with a 20% discount!
I have shopped around, with other carriers and even directly on USPS website and their post office and what I got on ebay was always cheapest. I am obviously talking about small packages shipped 1st class, nothing over $10 shipping cost.
You actually get a discount from just going to USPS.com and creating your postage on there. I'm not 100% sure if it's the
exact same discount, but I think it is. Although, if you want a
UPS discount, you will have to go through a really simple application process. The worst part though is that I've found that it's
really easy to have something strange happen and have the UPS label creation no longer work with PayPal. I had to remove my perfectly legit UPS account because it just refused to work with PayPal, and eBay, which worked fine with UPS, would no longer create UPS labels. That meant that I lost my discount, and that I had to reapply. :\
Also, keep in mind that if you do eBay-calculated shipping costs, they
factor in the discounts when charging the buyer. This is pretty new to me, and I'm really not a fan of the change. The thing is... I'm not trying to rip my buyers off, but the difference from the discount actually helped pay for insurance and things like signature confirmation.