I sell only in the UK and I offer free shippnig. My items often go out in decent size shipping boxes, think more than 50cm long.
I've just had my first transaction with a seller in Jersey. The normal UK shipping cost of £7 is going to be £25. I've done my checks on various sites like Parcel2Go and ParcelMonkey etc and this is the result.
For future transactions I could remove free shipping and put in place a complicated schedule of differential postage costs depending on size and destination but for me keeping things simple is a top priority. I've decided to remove non-UK mainland destinations from my settings.
I just thought I'd share this in case it might be relevant to anyone else.