As far as shipping charges go, you can have a note in your shop that says you will refund the shipping if they want to do a local pick up. Or you can put on your shipping policy that if they are local they can pick up and skip the shipping fee, but that you would make them a reserved listing if they are interested in a particular item.
As far as what etsy charges to sell: They charge 20 cents to list an item and 3.5% of item. (does not include shipping price) Paypal which I use also charges me 30 cents plus 2.8% of item. (including shipping)
I have found help using this calculator. I just punch in how much I want to make and it tells me how much I need to charge. http://www.gregledet.net/efcm.html