The roof is now a commodity

By Adam Sand, Roofing Business Partner.

Technology democratizes consumption and commoditizes production. If you're the best in the world, you get to do it for everyone.

Google is measuring what matters 

Google is quietly asking its users a straightforward question: is roofing a commodity? To be clearer, they are actually asking its users this question about everything they are considering buying. If given the opportunity to avoid the cognitive load of search and selection, sifting through the 10 blue links provided after their query to just make a decision based on price, would they do it?  They also don’t appear to be taking no for an answer, and some could say they are even putting their fingers on the scale with constant evolution of the question, almost asking:

• "Are you sure?”  
• "What about now?”  
• "…okay, but what if I did it this way?”  

Digital chivalry and charisma might be dead as well, cast out for the ever-improving UI/UX. Remember when Facebook used to get roasted for changing once every five years? We definitely aren’t in Kansas anymore as our brains are being prompted and probed for our response in a volatile flurry of evolving buyer experiences.  

Editorial note: I have been writing with “em-dashes” for decades; shame on AI for making them slander every writer into not using them after becoming so comfortable with them for trying to communicate the words in our heads to the minds of our readers during its writing infancy. While you might see some in this article, I assure you, this piece, as Brad Pitt said in Mr. & Mrs. Smith, is "all me, baby."

The great decoupling: Exposing the old model 

Every day there are billion-dollar battles being fought on a landscape we often don’t see but we can feel it because we subtly act and respond and often find ourselves weighed, measured and found unworthy.  

Usually, when the “getting's too good” the “other shoe drops.” Everyone is chatting about the Artificial Intelligence hype cycle, trying to time the bubble. We can all see it for what it is, but the question isn’t whether it is a bubble or not; it’s whether Influencer A can cause the short squeeze to the benefit of the bear while the companies can continue to inflate the bubble to the benefit of the bulls long enough for them to figure out how to create lasting intrinsic value. While the masses squabble about it, gambling their way through puts and calls, VC’s try to pick winners and spread the risk around looking to take some risk out at the next round. The primary beneficiary has always been those who can achieve enough network effect, critical mass or data collection to be worth something when the dust settles. Those large language models will still exist when many of the stocks go to zero; no one is going to come put all the GPU’s back in their boxes and sell them as a “lightly used” at best buy the rejoicing gamers. There will still be the lessons learned from a billion split tests, some form of balance will be achieved and to the victors will go the spoils.  

In the meantime, the information asymmetry of everything is being challenged. Google, and by extension AI research labs, are doing just that: research. One of the biggest inflection points of profit for any software platform is when they can get to a point to capture the highly coveted transaction fee. If they can get just enough volume of transaction that they can take a piece of the processing fee, charge some kind of service fee or essentially tax the provider a palatable fee to one or both sides of the transaction — they become a unicorn story.  

My first billion-dollar lesson 

Short story time. A long time ago, I made an app for tanning salons. We’re talking the early days of the iPhone when “there’s an app for that” felt empowering. In those days you could sell a business on building their own app to put in the app store because it was like a fridge magnet. People in those days understood why the plumber left you a fridge magnet, people would hang their kids finger paintings on the fridge and the magnet would be a constant reminder of who to call when those kids inevitably flushed 73 Q-tips down the toilet. That analogy wouldn’t work today in a world of millennial gray and perfectly polished stainless steel that must never be scratched holding a precious memory. Just snap a photo of the finger painting, toss it and see it on your Facebook memories three years later.  

I sold this “tanning salon fridge magnet app” concept to a bunch of purveyors of paid sunlight before eventually getting crushed under the weight of new operating systems and app design frameworks. My only choice was to sell it to a franchise and try to get one last win out of it. The getting was too good, and big tech beat me. What I noticed happened later was that the idea later evolved into an app called Mindbody which created a transaction fee and took part in the payment processing and escrow payment for the chargeback to the customers who didn’t show up for their appointments. My first billion-dollar lesson.  

Deconstructing the “markup” and how big tech sees it as “white meat” 

The general cost and profit rule of the roofing industry is 30-30-30-10 as a base minimum for running a roofing company that will grow. I presume similar ratios exist in the roofing space. Over the last decade, I have engaged thousands of conversations with roofing contractors and had varied engagements with about 500.  What this taught me is that, in a general sense, every roofing company spends about 30% on material and about 30% on labor, and the customer is paying that additional 40% as gross profit. In that gross profit, you generally have somewhere between 4% and 8% spent and reinvested as marketing to meet the next customer, and 8% to 15% spent on commission to convince the customer of which roofing company to buy from. 

Generally speaking, if the marketing is better and the brand is better and the offer is better, the commission is less. But to say that, on average, a roofing company invests about 15% of the customer's money to meet the next customer is pretty safe.  

That 15% is perceived as white meat. It essentially looks to Google that the homeowner is paying 15% of the value of their roof simply to be marketed to and sold to. And they think they can do it for less. To that end, they're saying, "Lower your price.” 

The behavior is indicative that they are going to price shop you on behalf of the homeowner to reinforce the relationship via a super intelligence absorbing cognitive load and resulting decision fatigue eliminating the information asymmetry that typically justifies that 15%.  

Mistakes love a rushed decision 

Homeowners are not merely your prospects; they are human beings who live in a world where self-reflection is delivered minute by minute with the crushing reality of “the feed.” Everyone has had an example where they have landed in one camp on any particular issue and shortly recognized the error in their ways. Whether it be a social media post that gets backlash or a selling Bitcoin at the “peak,” only to watch it go up for months.  

The lesson learned is that mistakes love a rushed decision. Rather than getting better at negotiation and debate, homeowners “do their research” — a flawed but preferred tactic to actually getting better at buying. They simply resort to cop-out objections like, "I need to think about it." As sales professionals, we know this is a polite evasion. The homeowner is not actually planning a thoughtful deliberation, rocking in a grandfather's chair and staring through the fog of a contemplative cigar into the distance, just to ponder the three quotes before them. 

They are going to take those three quotes, upload them into a $20-per-month ChatGPT window and say, “Tell me what to do”.  

So when someone offers them the ability to save themselves the trifecta of 90-minute dog-and-pony shows with what they imagine being an uncomfortable, high-pressure sales experience — they are going to take it. Even if it poses a risk, they will always choose their time over your position that they are taking a risk. They believe if they get into trouble, the black box of 40 extra IQ points will help them in that circumstance, too.  

The modern consumer approaches every major purchase armed with "self-advocacy," elevating their search results above expert advice. We see this in healthcare, where patients demand specific tests based on a WebMD search. This expectation for self-guided transparency and empowerment does not vanish when they buy a roof. They treat the roofing market like they treat buying a car or booking a hotel. The success of platforms like Carvana (automotive), Trivago (travel) and Thumbtack (general home services) proves that consumers prefer transactional gateways that minimize friction and maximize price discovery. They will always choose the path of least resistance and greatest perceived value. 

Technology democratizes consumption (the AI effect) 

The solution to the customers problem is not solely being funded with your 15% blended cost of customer acquisition either! The insurance side of the industry is also looking at that 30% material and 30% labor because they are a massive consumer of both! If you zoom out enough, we can remember there was a time where blanket approvals of contractors' proposals a reality. If your homeowner was hit by hail or a tropical storm of some kind, they would simply call their insurance company and the recommendation was to:  

1. Find some contractors 
2. Get some quotes 
3. Pick one to do the roof 
4. Send them a copy of the bill 
5. Receive a payment less the deductible and some depreciation 

The original friction was introduced not by the homeowner, but by the contractors. Early storm-chasing entrepreneurs quickly turned hail damage into a lucrative "sky diamonds" trade, triggering an escalating arms race between insurance carriers and contractors. This conflict financially collateralized the entire claim food chain: the homeowner was the victim in the middle, while massive law firms, supplementing claims managers and adjusters lined up as beneficiaries. Both sides lobbied for reform: manufacturers pushed for product incompatibility and planned obsolescence; the insurance industry fought to strike down Assignment of Benefits (AOB); and state legislatures created Unlicensed Practice of Public Adjusting (UPPA) laws to control how roofers could discuss policy. This entire ecosystem injected billions of dollars of friction and "froth" into the market, forcing the homeowner to navigate an adversarial, complicated landscape just to replace a damaged roof. 

The exhaustion from this escalating conflict is leading to an inevitable truce. "Proliferation Reduction Summits" are now underway in boardrooms across the country, fueled by the consolidating power of private equity gobbling up the industry. Previous foes are sitting down, discussing the denuclearization of the claims process and agreeing to decommission their various weapons of destruction. I suspect this is happening in high-friction industries outside of roofing as well. 

This deflationary ecosystem could be an economic win for the entire country. As America spirals with debt and inflation, a deflationary pressure that puts power back into the hands of the middle class — driven by vertical integration and increased efficiency — might be just what the invisible hand of capitalism is voting for. 

In these quiet rooms, insurance carriers are exploring direct repair options built entirely on shared information. For example, firms like Loveland Innovations are leveraging AI and drones to create a single, shared source of truth. The process is remarkably simple: a claim is filed, shared with the roofing company and low-cost hourly worker drives to a house, initiates and supervises a pre-specified, autonomous drone flight path. This drone, equipped with a specific camera of agreed capability, takes a predetermined number of high-resolution images. 

These images are then analyzed by an AI trained on millions of examples through reinforcement and machine learning. A simple confidence slider, say 80%, allows the insurance company to arbitrate the decision on what damage does or does not exist on each roof slope. This automated scope is cast against the policy terms, agreed-upon labor rates and transparent material pricing shared directly with suppliers and manufacturers. 

Under these new rules, both sides benefit from drastically reduced human interference, biased interpretation and material self-interest. These efficiency gains have already begun penetrating the retail space, with technology providers like Roofle, Eagleview, Hover and Drone Deploy deploying them as competitive, profit-improving solutions. This is the new relentless pursuit of market advantage: redeploying capital toward truly impactful endeavors, not high-friction sales and “me too” marketing. At the end of the day, we’re selling: 

• The same shingles 
• Installed the same way — to manufacturers’ spec 
• By the same kind of people 
• Using the same tools 
• In roughly the same amount of time 
• For about the same price.  

What does a homeowner gain by paying 5% more for a Facebook ad to say something fancy about that and a salesman 10% to come out and be convinced of it?  

The buyer’s journey is simply going to change.  

We are going from:  

Lead > inspection > quote > sign > install > discover if happy with the outcome / weigh options of arbitration if not > Google review 

to:

Quote > feel assured of happiness in outcome > sign > lead > inspection > install > empowered arbitration > Google review 

…. and the platform will decide if you get recommended again.  

Technology commoditizes production (the winner’s advantage) 

There is no doubt in my mind that the Silicon Valley bros of the tech oligarchy will make sure to get their hands on it to democratize access to its benefits to homeowners, in exchange for that platform fee. It might come in the form of a Thumbtack lead. It might come in the form of a 5% Directorii Guarantee. Eventually it’s going to become a 2.9% processing fee and 1.5% brokerage fee payable to Google to sell the roof for you and schedule the job with an AI voice agent on your install calendar with a smart contract and payment escrow. Your job as a roofer will be to figure out how to break it to the sales reps, production manager and marketing agency that the world has changed and there needs to be a rebalancing of compensation, roles, responsibilities and workflow. The winners will be those who most effectively and reallocate those funds to the labor crews to be able to produce the most roofs at the lowest price for daddy. (that is, Google, Thumbtack and Nextdoor). Pray Uber or Amazon don’t get ahold of your crews first and go direct-to-consumer or the manufacturer doesn’t partner up and do that direct-to-consumer format with them, cutting you out entirely. In case you missed it, that was your hint that this has happened before. There is a recipe, and it might take some time, but all of a sudden, it’s going to happen overnight. A few writer downers to remember.  

• Success leaves clues 
• The Super Bowl is won in the draft 
• Rich screams, wealth whispers 
• Fortunes are built in private, but the lessons go public 

Remember, Carvana was built out of a car rental depot from 2014 to 2017, went public, had a meteoric rise, subsequently lost 99% of its value and then came back better and bigger. Many a billion-dollar company was built in a garage, and along the way disrupted dynastics, toppling established monarchies. Bill Gates once said, "Be nice to the nerds — you will most likely work for one."  

The new winners are going to be the ones who create guaranteed outcomes in production quality control, proactive remediation and managed services through sensors and drones, logistics support and supply chain integration. Private equity is your early sign, the dehumanization of the roofing industry through forced optimization by seasoned operators consolidating industries leaving a more capital efficient behind taking massive exits on their way out of roofing and onto the next fragmented industry. They will not get it all right. Many will fail. There will be winners and losers, but the consumer will end up with less decisions to make and a more predictable outcome. At one point, the finest cabinet maker in the land built only 100 bespoke pieces in his lifetime. Organized storage was a luxury of the rich; now, anyone can go to IKEA and outfit an entire apartment with functional, modern storage. A good tailor was once worth their weight in gold for custom quality. Today, we simply walk into a fast-fashion store like Old Navy, buy five new shirts for the price of one custom alteration and discard the old ones without a second thought.  

Free markets will decide 

You are going to either see a reduction in price for the consumer or a higher price paid for the labor as the winning strategy. I don’t believe you are going to see sales reps continue to get a  $2,000 commission to spend two hours with the customer convincing them that their good instinct was right and choose their company for the new $20,000 roof they needed to buy anyways. 

The new rules — An inevitable outcome 

Prediction: A billion-dollar e-commerce-first national roofing company emerges in the next five years.  

Question: Is your roofing business a “roofing” company or a high-cost sales and marketing organization that happens to install roofs? What must you decommission today to survive tomorrow?  

Those two questions must live in your head rent-free as you approach 2026 business planning. A smart investment of time and energy is using AI to understand this coming shift — not by bolting on a shallow chatbot, but by fundamentally reviewing your enterprise value. We are seeing too many companies add "AI Agents" on top of a weak value proposition, which only frustrates users with unnecessary dialogue. You cannot bolt AI onto a broken business model. 

Instead, deploy AI to create your strategic plan. Focus on these critical questions: 

• Alignment: How can you better service a democratized consumption market and scale within a commoditized production environment? 
• Integration: Where can you integrate your business or build systems that make you a target for acquisition? The goal is to package your invaluable experience into a solution that can be deployed nationwide. 
• Leadership: How can you become the leader who builds the best teams in the areas that will remain valuable — the production, logistics and quality control — making your people the scalable, optimized layer of the future roofing engagement? 

Do this or find help. If you want to talk about it, I’d love to chat.