It's a tough business. It costs to have your logo either digitzed for embroidery, or screens made for them. I have been in the business for the last 4 years, and I am slowly getting out. We still screen up to 6 colors, or use a 4-color process, and we still do some embroidery.
But once your shop has the design digitized or screens made, they usually won't charge you more for reprints. They will charge more if you bring in your own shirts, sometimes.
And yes, there is a big mark up on apparell. But remember, there is a pretty big mark up on CC'ing, also, if you figure the actual costs.