Amazon Prime isn't free shipping (as far as I know >$25 standard shipping is still a thing). It's a flat rate for unlimited 2 day shipping. Two day shipping is expensive, but the combination of an annual fee and the increased likelihood of purchases for subscribers is good for Amazon's bottom line. Subscribers get faster shipping and pay less as long as they order more than four or five things a year. It seems like a pretty decent win for both consumers and Amazon. I imagine Amazon's brick and mortar competitors are somewhat less amused.