[Spooky23]

eBay and Amazon is different. Pushing shipping fees into the item cost is a profit driver for them. When you pay shipping explicitly, those costs usually aren't driving profits.

Remember the classic EBay scam back in the old days? You'd sell some widget for $5, with $25 shipping. Commissions were calculated on the item cost and excluded shipping.

Also, Amazon is making rule/practice changes that are eroding the benefit of Prime. In 2010, they would send products to me that weren't in east cost warehouses via 2nd Day air. These days, they usually just deliver it late.

[munger]

Yeah, this. The other thing the $.99 item with $5.99 shipping does is allow refund scams - you would of course be able to return this item, but only if you paid return shipping costs and then you only get refunded the $.99 item price meaning you would generally lose money on a refund.

Building shipping into the cost like Prime however, might do the reverse and expose a seller to over-refund issues where they would lose more on a refund if it must include the total item price without shipping. (When shipping is "free" and built in to the item price.)