I really don't like prices that are simply higher to accomodate shipping. That feels deceptive to me, because often sites tout their free shipping, but you'll notice their prices are just higher. I would rather just pay shipping. I don't mind shipping that is higher (slightly) than what I know it would cost to ship the item, because I realize there is work involved in shipping. However, I also judge a little bit by the size of the operation. If I am ordering from Land's End, I do get a little ticked off about shipping charges, because you know that with their huge volume, their shipping costs are much lower than what you pay. But with smaller companies, or WAHMs, I don't care at all about shipping, because I understand what is involved in the work and getting it shipped out.
Another big however, is that if WAHMs actually charged true retail prices, then free shipping would not be as big an issue, since your profit margin is a lot higher when you are both manufacturer and retailer. But another ball of wax.