So from my preliminary research, it looks like Sears/Kmart are similar to Amazon in that there's no clear way to predict where the item will be shipped from. So far only walmart seems to show any consistently in this regard. If this is really the reason why we're ranking lower, it's going to be tough to get back to where we want to be.
For now, I think our time might be better spent on getting traffic other ways, like promoted listings, taking advantage of the new "Buy Box" feature, advertising, etc., especially since as far as I know fixing the item location isn't even guaranteed to improve our rankings at this point anyway.
