You are right it actually cost much more
I charge a flat rate of $45, usually the shipping label alone run me at least $55/$75 for a 12x9x6 box this does not include packaging at least $5 and gas to go to the hub $7, I absorb on average $22 to $30 of the real shipping cost.
Is shipping the cost of doing business and should be included? Why would it, other companies charge for shipping also don't they?
I offer a flat rate shipping, some may require the exact shipping amount for their animal and some may offer free shipping, bottom line you dictate how your business should be ran, not the customer not the competition.
Be smart about your business and don't be too rigid, sometimes it is a case by case thing, should you offer free shipping for an animal that's $100 probably not unless you want to lose money but don't you think that someone that spend a few thousands would not appreciate free shipping even if it only save $80?