'There is quite a bit of difference between the price of a Royal Mail 2kg small parcel, and a 2kg medium parcel.'

This is exactly the problem I had.

I didn't know it was going to be a medium parcel until after I packed and can't see a way of changing it once eBay sent me a postage label. I don't want to cancel and re-list as the buyer wasn't paying for postage anyway (I always sell with free postage) 

How do I opt out of Simple Delivery? I can't see the answer on eBay help...