people factor shipping charges into total purchase price and bidding amounts...so IMO it matters not if shipping i free or $10, but also factoring shipping costs into starting price if doing free or lowering does not ALWAYS work. I have studied this and tried it for a full 30 days on over 6,000 listings. Items I listed for 99 cents with $2.99 shipping got bids and the exact same items that were $3.99 with free shipping did not...much of that has to do with so many just looking at bid price and folks searching by lowest price or the mentality that the starting price is lower...also ebay searches sometimes favor the free shipping items but others favor the lower priced in the best match, which is a calculated formula
I think free shipping makes more sense on higher end priced items for sure, but my experiment convinced me, not to mention if you have a $9.99 item and want to move it to say $12.99 with free shipping then you are also paying higher starting price fees if running auction style
BUT everyone should try what works for them, problem is so many have too small sample sizes and opinions on the matter rather than running tests/experiments or looking to terapeak data or those with high qty selling experience IMO, because the answer is clear IMO, and again I have been at $2.99 for 16 years on ebay and that is back when it cost 50 cents postage to send a card but supplies were higher
again, those throwing out prices to ship make lots of assumptions about where people buy supplies and the bulk that they buy them in, plus again it throws out fact that ebay/pp charge you on your shipping charge, not saying pass along fees from auction to buyers, but if post office charges you $1.64 for a card, and you pass that along, then if ebay and pp charge you 40+ cents when you charge $3 shipping then isn't that a 'cost' of shipping? Not trying to nickel and dime, but sellers get nickel and dimed as well plus have overhead costs and charge backs, lost packages, etc...
The bidders can adjust their bids higher or lower as they see fit and are comfortable with. To me that is point and simple, just like buying on amazon.com or anywhere...pick and choose.
My ebay store: http://stores.ebay.com/brentandbecca?_rdc=1