I've been co-owner of a company that sold educational materials--CDs and videos--by mail. In our case, S&H was handled together: there were fixed costs for the packing materials and the time to prep the package, etc. Postage was based on weight, so we figured a per-item type of charge that approximated the usual amount. (It would be too labor intensive to charge actual shipping cost, so we averaged, and made some money or lost some, depending on the actual order.)
I don't object to a "handling" charge when the company sells by mail AND at an outlet; for instance, I can pick up stuff at Dadant, so I don't want the time and materials involved in packing to be included in the cost, since I'm not asking them to do that. But shipping should be a close approximation of the real cost, plus or minus a reasonable amout.
Your handling sounds a bit high, and your shipping pretty darn high. Do you know what the actual shipping cost was? (To me, $1.50 would be plenty to cover them time and materials to prep for shipping a single small bottle.)
The other possibility is that this is how they encourage people to make a larger (and therefore, more efficient, in time and materials) order.
How do others feel about their vendors? I can drive to Dadant, but they don't have all the things I want, and I'm interested in others' experience.