Unfortunately, that free shipping does come with an expense.
Many decades ago, the international world agreed to an international postal standard. If I send a letter to Japan, it is the US postal system that pays to get it to Japan. After that, Japan postal delivers it to the receiver. Japan does not get paid to handle the letter. When the convention was signed, it was thought that numbers would kinda equal out. Saves the sending country from having to calculate their cost to get the letter to the receiving country, and what the receiving country will charge the sending country to finish the delivery.
Now, as I understand it, China heavily subsides the ships delivering Chinese goods. In many cases, the shipping cost for the seller, is what it costs him to drive across town, and drop off the parcels that then get stuffed into a container. Once that container arrives in the US, it is on the US postal service to deliver it to my door step. There is no concern as to where in the US, the item is to be delivered. I have had stuff arrive in LA, Washington, NY, are a few I can think of. Obviously the item arriving in NY, will cost the USPS more to get it to me.
That 35 cents in the above e-bay sale, could very well be the actual shipping cost.
I believe a good portion of the stuff sold by a lot of the Chinese sellers, is factory overruns, rejects, and the like.
The powers to be, blame Amazon on the USPS losses, but I think China is the bigger cause.