Of course the shipping isn't free. But probably, the shipping to a handful of more localized facilities and then to the home directly is cheaper than the cost of shipping one case of that product to each of 4000 brick and mortar locations, where it might sit, tying up capital at each one for weeks before selling.
The article uses a 40% split too - I seriously doubt that the cost to ship a $6 item is $4, especially for Amazon running their own logistics network to lower costs even further. I don't quite understand why unbundling the shipping cost would be somehow better, meanwhile my local grocery store or Best Buy doesn't separately charge me for their transportation costs to get the item to the store location.
None of this is to defend the obviously undefendable Amazon - sounds like the FBA program is extremely predatory. And their selling ad placement on search pages has slowly ruined the shopping experience. I hope Amazon gets broken up for the good of the consumer and the market.
Hold up - a Republican AND a hypocrite? I'm completely shocked.