I've decided that this winter (which is our off-season) we'll begin offering $9.99 flat shipping on all orders and free shipping on all orders over $199, opposed to our current system of charging price + shipping. Our items are heavy and on average cost about $25 to ship. Subsequently, we'll simply be adding the shipping cost into the price. Our actual overall prices, will in effect, not change at all.

We're the price leader on most of our products. However, I'm worried that now we won't appear to be so economical, despite our prices not having changed. We also have at least one major competitor who prices shipping separately as we currently do.

Currently
US $99.99 + $35 shipping
COMPETITOR A $145 + $7.99 shipping
COMPETITOR B $110 + $37.99 shipping


New Format
US $125 + $9.99 shipping
COMPETITOR A $145 + $7.99 shipping
COMPETITOR B $110 + $37.99 shipping

I'm sure we'll compare more favorably to competitor A now. However, I'm worried that competitor B will now appear to be the price leader. At the same time, I think consumers may be more quick to dismiss companies with high shipping and therefore we'll compare more favorably to both companies.
What's your opinion?