How do contractors handle charging markups on materials without feeling guilty?

Flip the logic. A client will never say "oh let's pay him more". They'll never say "he's only charging us a 5% markup, I feel bad... Let's give him an extra 10%."

So why do you feel bad? Your markup goes towards the cost of a truck, maintenance on it, the ability to buy another one, the time and expertise to know what to put and where to get it etc. 

Low level clients will want a line item breakdown. High level clients will want it done well and efficiently. Don't show your markup. Bundle it.