I agree with all of this. Downtime is administrative overhead, which you have to bill for. I tried to be clear about that but I think I failed. However, not al

I agree with all of this. Downtime is administrative overhead, which you have to bill for. I tried to be clear about that but I think I failed. However, not all handmade producers are working on spec, or by commission -- i.e. they do not match the reactive manufacturing model you describe above. Many of them produce at full capacity and find markets for their products. They manufacture proactively and sell constantly (Etsy, craft fairs, etc). There will be some overproduction, which has to be priced in too. Sometimes you have to hire people to handle fluctuating demand. You have to train them on your production methods. This is overhead too, but of course your production capacity goes up. I have a friend who sells consistently over the year, but demand more than triples in the holiday season. She can't always predict which products will drive the demand "this year", so she can't always manufacture proactively. She hires friends to help her get orders out the door in Nov/Dec. Maybe my lack of clarity is because there are many different kinds of handmade products. Someone selling custom cherry dining tables for $10K+ has different concerns than someone selling small sewn gifts for under $50.