[thayne]

The mechanics might be different, but the "free shipping" is still subsidized by driving the price of the product itself up. Either way, all consumers pay a higher price, so that a subset of them don't have to pay for shipping.

[Guvante]

Historically you are careful with free shipping to ensure the loss is less than say a retail cut of the price.

That is why minimum orders were so popular, if it cost say $8 to ship something and a retail margin is 15% I can do the math on a break even point where it is a wash or better for the vendor.