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but I don't know if that just means that they are covering their true costs (including packing materials, and possibly labor), or if they are treating shipping as a profit center
Here is also where they should recapture part of their insurance costs for material shipped.
Not to defend any firm in particular, there are overhead costs for shipping which far exceed the actual postage or fee to get the item from point A to point B. Packaging materials, labor, insurance are not free.