How Roofing Companies Can Protect Their Margins from Tariffs

With new tariff increases looming in 2025, roofing company owners are facing a perfect storm of financial challenges that threaten to erode those hard-earned profit margins.

Recent announcements regarding the Trump tariffs and their planned expansion have sent shockwaves through construction material supply chains. As a roofing professional, you’re caught in the crossfire between maintaining competitive pricing and preserving your bottom line. But before you resign yourself to thinner margins, let’s explore how your business can not only survive but potentially thrive during these turbulent economic times.

Tariffs Impact on Roofing Industry: Understanding the Fundamentals

Before diving into solutions, let’s get clear on what exactly we’re dealing with. After all, you can’t patch a roof properly without first identifying all the leaks.

What is a Tariff?

A tariff is essentially a tax imposed on imported goods, creating a ripple effect throughout the supply chain. For roofing companies, these taxes directly impact essential materials like asphalt shingles, metal panels, fasteners, and underlayment – the literal building blocks of your business.

The upcoming 2025 tariffs are projected to increase costs on imported building materials, with different rates depending on country of origin. Chinese imports potentially face the steepest increases on some roofing components. These aren’t small numbers when you’re ordering materials by the truckload.

How is Roofing Impacted by Tariffs?

The immediate effects of these tariff hikes will likely include:

• Increased material costs across most common roofing materials
• Extended lead times as suppliers adjust inventory strategies
• Greater price volatility as markets react to policy changes
• Pressure on manufacturers to shift production domestically (at potentially higher costs)

As one supplier bluntly put it in their notification letter: “These increases will affect the entire industry. No contractor or supplier will be immune.”

How to Calculate Your Margin in the Tariff Era

With material costs in flux, understanding your true margins becomes more critical than ever. Let’s be honest – some of you have been operating on gut instinct rather than solid math. That might’ve worked when the market was stable, but those days are gone.

According to JobNimbus’ Peak Performance report, 66% of roofers report gross profit margins between 21-40%, with the majority falling in the 21-30% range. That’s your benchmark – and your warning signal. If you’re already at the lower end of this spectrum, tariff increases could push you into dangerous territory.

The basic formula remains unchanged:

Gross Profit Margin = (Revenue – Cost of Goods Sold) / Revenue × 100%

But here’s where things get tricky. Your COGS is about to change, sometimes with little notice. This means you need systems in place to track these changes in real-time, not at the end of the quarter when the damage is already done.

Adjusting Your Margin Strategy for Tariff Resilience

The 2025 Peak Performance report reveals an interesting insight: high-revenue roofing companies maintain similar markup percentages to their smaller counterparts (most falling in the 10-30% range), but leverage better supplier pricing to improve margins. This suggests a clear strategy forward.

Supplier Relationship Management

Your suppliers are feeling the tariff squeeze too, but they also need your business. Now’s the time to have frank conversations about:

• Locking in prices for specified periods
• Exploring volume discounts based on committed purchasing
• Creating strategic inventory plans to buy ahead of tariff implementation dates
• Investigating domestic alternatives where practical

Pricing Strategy Adjustments

The data shows only 2% of roofers achieve net profit margins above 50%. You’re not trying to join that unicorn club during a tariff storm – you’re trying to maintain healthy operations. This may require price adjustments.

The Peak Performance report indicates that roofing companies doing both retail and insurance work perform strongest in the 21-30% gross profit category. This diversification provides flexibility – insurance work typically allows for more stable pricing even as material costs fluctuate.

When adjusting retail pricing, consider:

• Transparent communication with customers about material cost increases
• Tiered pricing options with different material choices
• Limited-time guarantees on quotes (30 days rather than 90)
• Value-added services that improve margins without increasing material costs

How to Stay Profitable with Tariffs: The Technology Advantage

While you can’t control tariff policies, you can control how quickly your business responds to them. This is where your technology stack becomes your financial radar system.

Roofing Supplier Integrations

Perhaps the most powerful tool in your tariff-fighting arsenal is the integration between your business management software and your suppliers. These connections provide:

• Real-time material cost updates
• Automated margin calculations on estimates
• Inventory management to optimize buying decisions
• Historical cost data to track trends and forecast changes

Companies optimizing their pricing strategies through software that tracks costs and financial performance can make adjustments more quickly when material costs change. This is because they spot margin erosion immediately and can make micro-adjustments before significant damage occurs.

Turning the Tariff Challenge into Opportunity

The roofing companies that weather this tariff storm won’t just be survivors – they’ll emerge stronger by treating this challenge as an opportunity to build more resilient business systems.

Another overlooked strategy: payment flexibility. The Peak Performance report shows that while 95% of roofers accept paper checks, fewer have embraced digital payment options. Companies offering financing options (83% of high-volume companies do this) turn homeowner price concerns into manageable payment plans – particularly valuable when prices must increase due to tariffs.

Remember, tariffs are essentially financial weather patterns that affect the entire industry. Your competitors face the same challenges. The difference will be in how quickly and strategically you adapt.

By calculating your margins accurately, adjusting your pricing thoughtfully, leveraging supplier relationships, and embracing technology integrations, you’ll be positioned to maintain profitability even as the tariff landscape shifts beneath you.

Ready to transform your business systems to combat rising tariffs? The first step is implementing technology that provides the visibility and control you need to protect your margins. Your future self – the one still standing strong while others struggle – will thank you.