Amazon gives non-Prime members free shipping at $35 or more of eligible items. Instead of simply letting users get the product with free shipping, they’ve added a discount that prices it exactly one cent below the $35 limit, while only subsidizing the price with $3.38, which is about half of what they’ll then charge you for shipping.
They inflate price to offset shipping costs for prime members. This hits cheaper items harder. They used to have add-on items to get around this but I haven’t seen that in a while.