Of course, there's really no such thing as free delivery; all costs have to be built in to the total price (or you go bankrupt :-/).
What can happen when the seller charges a flat delivery rate (rather than e.g. priced by weight) is that some orders appear to be a 'better deal' than others, i.e. if you order multiple items you still pay the same delivery charge, but if you only order one low value item then the delivery charge can be off-putting. Just like if you work out the relative petrol costs to drive to the shops to buy a pint of milk instead of doing a weekly shop! The advantage of the flat rate to customers is that it's easy to understand and you get a very good deal on larger orders.
Free shipping looks attractive, but it's not always the best deal. Going on the principal that all costs are built into the price and that there's no such thing as free delivery, you could end up effectively paying for delivery several times over if you order multiple items. Sellers who offer free shipping on orders over a certain value, e.g. over £50, (reckoning that the free delivery offer will be a strong incentive for you to increase the value of your order) are usually giving you a good deal because shipping hasn't already been factored into their item price. In effect, they are genuinely reducing their margin to pass on to you as a thank you for a larger value order. Sellers who then offer a discount to TSR members on top of this really are to be cherished
On eBay, delivery costs are sometimes skewed by sellers who are trying to reduce the fees they pay to eBay. They lower the 'item price', then bump up delivery charges to compensate. By law, eBay can only charge their % fee on the item cost. What these sellers save in fees, they lose in reputation, though, imho.
If your main criteria in choosing where to shop is price, then you need to compare the total price for your whole order. In practice, it's often 'swings and roundabouts'; different sellers are slightly cheaper for different orders. All the more reason to base your buying decisions more broadly, looking at the expertise, service and ethos of the seller. When you do this, sellers who are genuine enthusiasts about what they sell start to look like great value.