If you want to offer free shipping for all your Merchant fulfilled items first you need to set this up in Seller Central. In your seller account on Amazon go to Setiings > Shipping Settings, click the "Edit" button for the "Your Price Banded Shipping Rates" box, click "Continue", set all "Shipment Rate" to zero and click "Continue", then finally click "Confirm".
After changing your shipment rates in Seller Central, in SellerEngine Plus you need to go to File > Preferences > Shipping Credit, and set all values to 0.00
As a result, when items are repriced you will no longer have the shipping credit subtracted from the final price when items are repriced with a schema that has the option to compete against total Price + Shipping enabled. We recommend that you run a few reprice tests and check the reprice log to see how this setting is applied.