When Tariffs Shift the Numbers: How to Talk to Clients About Price Changes

If you run a design studio, unexpected price changes can quietly eat at your client’s trust and your project’s margin. A new tariff gets announced. A vendor adjusts their pricing. And suddenly the sofa you specified costs 15% more than it did when the client approved it last month. These conversations are never easy—but they are manageable.

The answer isn’t just what you say when a price changes. It’s the process you put in place from the very first meeting. A good system for tracking your numbers and clear, early communication are your best defense.

Setting expectations early: your contract is your first conversation

Your Letter of Agreement is the first and best place to talk about price volatility. Most studios I work with already have a clause stating that quotes are valid for a limited time—usually 30 days. But a clause buried in a contract isn’t enough. You have to talk about it.

During your onboarding meeting, walk the client through this specific section. You’re in this together. You might say something like:

"We work hard to get the best possible pricing for you. Our proposals will show current costs from our vendors, and we’ll honor those for 30 days. If we see big market shifts—like new tariffs or material surcharges—we may need to look at the budget again. We promise to be transparent and bring you any changes with clear documents from the vendor as soon as we hear about them."

This isn’t about scaring the client. It’s about showing them you’re an expert guide through a complex process. You’re telling them you’ll navigate these issues together.

Building in a buffer: the contingency conversation

A contingency fund is standard for construction, but it’s just as critical for furnishings. It’s not a slush fund or an optional extra—it’s a tool for keeping the project on track.

I recommend a contingency of 10-15% of the total furnishings budget. For projects with a lot of items sourced from overseas or with very long lead times, I lean toward 15%.

When you present the budget, show the contingency as its own line item. Explain what it’s for. It’s there to cover unforeseen costs without derailing the design or forcing compromises on key pieces. This can include:

• Vendor price increases from tariffs or material costs.
• Unexpected freight or delivery surcharges.
• The need for a last-minute replacement for a backordered item.

By budgeting for uncertainty, you turn a potential crisis into a manageable task. When a price increase does happen, the conversation shifts from "we have a problem" to "this is exactly what the contingency is for."

The talking track: delivering the news with clarity and confidence

Even with the best prep, the moment will come when you have to share news of a price increase. How you handle this conversation matters. Avoid apologies that sound like you’re at fault. Instead, present the situation with facts, empathy, and a clear path forward.

Your job is to be a calm, informative partner. Lead with the facts. Show your work. Then propose a solution.

Here’s a real-world example. Let's say you specified a sofa from a vendor like "Artisan Weave Furnishings."

• Original Quote (Net): $8,000
• Your Markup (25%): $2,000
• Original Price to Client: $10,000 (Approved on March 15)

A month later, before you place the PO, the government announces a new 15% tariff on upholstered goods from that region. Artisan Weave updates their pricing.

• Tariff Impact (15% on Net): $1,200
• New Net Price: $9,200
• Your Markup (25% on new net): $2,300
• New Price to Client: $11,500

Here’s how you could share this with the client over the phone or in a short email:

"Hi [Client], I have an update on the living room sofa we selected. Artisan Weave just notified all their partners of a 15% price increase, effective this week. This is a direct result of the new tariffs on imported furniture.

The original price we approved was $10,000. The new price, with the tariff, is $11,500. I've attached the official notice from the vendor for you.

We have a couple of options. We can proceed and use $1,500 from our contingency fund to cover this—which is exactly what we planned for. Or, if you prefer, I can pull a few alternative sofas in a similar style that are sourced domestically to stay in the original budget. Please let me know how you’d like to move forward."

This approach does three things:

1. It states the facts clearly and without emotion.
2. It provides third-party proof—the vendor notice.
3. It offers a solution and reminds the client that you planned for this.

Your system of record: tracking every number from quote to PO

This kind of clear communication is only possible if your own house is in order. When a client asks, "What was the original price again?" you can't be digging through old emails or trying to make sense of a messy spreadsheet. You need one place for all your numbers.

Most designers I know manage this with a mix of tools—spreadsheets, Gmail folders, and maybe a platform like Houzz Pro, Studio Designer, or Programa. That system can work, but it requires incredible discipline. You have to track every version of every quote, every approval date, and every vendor email for every single item.

When a price changes, you need to be able to pull up the original quote PDF, the client's approval email, and the new quote from the vendor in seconds. This documentation is your evidence. It moves the conversation away from opinion and into fact. It shows the client exactly what changed, why it changed, and that your markup formula stayed the same.

Alcove's role: showing what changed and why

A scattered system of trackers and emails makes these tough conversations even harder. Having every number in one place is non-negotiable for protecting client trust and your own sanity. This is where a dedicated platform helps.

Alcove gives your team one organized system for specs, quotes, approvals, and financial context—so you can easily pull up original vendor quotes alongside new pricing. When a vendor sends a new price list, you can update the item's cost in Alcove and have a clear, side-by-side history of the change. You are no longer digging for an old email or a saved PDF. The entire financial story of that item lives in one place, from the first spec to the final invoice.

Having a system that keeps every quote, approval, and price change together isn't just about good bookkeeping—it's about protecting the trust you've built with your client. See how we do it at alcove.co.

FAQs

What if a client refuses to pay the increased price?

This is where your contract and the contingency conversation are so important. Gently remind the client of the terms you agreed on for price changes. You can explore options together—like finding an alternative product, adjusting the scope, or using the project's contingency fund. The goal is to find a way forward that works for both of you.

How much contingency should I typically recommend for a project?

It varies by project, but a common range for furnishings is 10-15% of the total budget. For projects with many imported goods or long lead times, I think it's smart to lean toward the higher end of that range to cover potential tariff shifts or freight cost increases.

Is it my responsibility to absorb the cost difference if prices change?

Unless your contract says otherwise, you are generally not responsible for absorbing price increases from outside factors like tariffs. Your job is to manage the project and communicate changes clearly. Absorbing costs yourself can quickly drain your studio's profit and set a tough precedent for future projects.

How do I present the 'new' price without making the client feel like they're being overcharged?

Focus on the facts. Show the original vendor quote, the date it was issued, and the specific reason for the increase—for example, "Vendor X informed us of a 15% tariff-driven increase on all imported goods, effective [date]." Present the new quote clearly, show the difference, and explain that this is an industry-wide adjustment, not a change in your markup.