But Wal Mart's shipping can be much cheaper due to their predetermined, set routes. A truck is going to that store every night regardless of what is on it. They often offer free shipping to the store because the marginal cost to them for putting one more box on a truck is negligible.

Amazon's shipping has fewer nodes in its graph. And the truck they use goes to your house every day: it just has UPS on the side.

Transport is just one part of shipping costs. Handling, inventory time and other operations overhead are also a factor.

Unless you've arranged to live within walking distance to a Walmart, you've got to get there one way or another; by buying gas and driving, or by taking the bus subsidized by the local municipality.

Seems to me like UPS (or whoever delivers for Amazon) also has predetermined set routes. Also, just because marginal cost is zero doesn't mean cost to shipping customer is zero.

Amazon has to ship its merchandise twice: first to their distribution centers, then to the customer.

Everyone has to use distribution centers and ship things multiple times - items come from Asia in shipping containers, which you have to break up and load into trucks, since individual stores don't stock inventory in amounts that large. Walmart has an extensive network of warehouses around the country that receive goods before they're shipped to the retail locations.

Additionally, given the lag on orders of new inventory from overseas (which can be months), Walmart and other retailers have to maintain a pool of merchandise here in the US that they can ship to individual store locations based on local demand to replenish inventory.