There is a difference between Overhead Labor and Manufacturing Labor.
It's really pretty simple, but knowing the difference can affect how you price your work and whether all your expenses are covered. All too often, artists and makers account for the time devoted to making the work, but fail to include their overhead labor. When you forget to include the overhead labor you have seriously under-priced your work!
In simplest terms, Overhead Labor includes all the tasks it takes to maintain your studio and business. In comparison, Manufacturing Labor (sometimes called, "Direct Labor") is the work that goes directly into each piece.
- Cleaning your studio (whether it is daily, weekly or yearly, it counts!)
- Organizing or preparing your materials
- Managing your inventory
- Packing your work for shipping
- Photoshop correction of photographic images
- Filling out show applications
- Sending out images
- Preparing your display
- Standing at your booth
- Driving back and forth
- Posting images online.
- (This is not a comprehensive list.)
Manufacturing labor is the time and effort that goes into each specific piece, item, artwork, sculpture, ceramic vase, painting, etc. This is the time that you sweat or actually knit, saw, rivet, hammer, paint, or design.
There may be some gray areas but you have to account for the labor somehow...unless you really don't care about being paid.
For example, if you mix a big batch of glaze, you know how long it takes to mix the glaze and how much the chemicals cost (more or less), but you probably don't know how much glaze goes on each item. So, in this example, you can estimate how much should be allocated to each piece.
Or you could add the time and material expenses into your Overhead Labor and Overhead Materials. But one way or another, you should account for all your expenses. Adding the glaze to your manufacturing cost is probably the most accurate, but sometimes it is too difficult to figure out that way.
The most important part is that you account for the full costs (including all the time and materials) that went into making the work, including the overhead.
The key point is that ALL ARTISTS AND MAKERS HAVE OVERHEAD LABOR and too many are NOT adding their real costs into their prices (e.g. costs like your time standing at a show selling work, posting work online, or packing work for shipping). Your TIME is not free, at least it isn't free if you're in business.
For a more personal example, I just spent the last two weeks unpacking 39 boxes, checking and cleaning work. I paid four part-time employees to help, plus all the hours I worked by myself. The employees are real expenses. I paid them an hourly wage, Workman's Comp, Medicare, Social Security, FUTA, and more. Even if I don't pay myself, they received checks. That is a real expense and all of it is Overhead Labor.
My goal is to pay myself...but usually, I don't sell enough. Consequently, I use my technical skills with my silver repair business to provide more income. I dream of being rich and famous but earn money with every hour of sweat.
PS If you haven't listened to the PowerPoint Presentation and Podcast yet from the Professional Development Seminar this should be your next step. Not Just Another Pricing Lecture: A Dialog About Pricing Your Work is available online for free at:
It's time artists and makers understand the full cost of producing their work. Prices should reflect all of the investment in your work.
This post was updated on January 15, 2022.