A handbag line business is a business that designs and produces a collection of handbags for a target demographic or market. These handbags are sold in retail locations and/or through online stores. It will also be right to say that a handbag line is any business that designs  handbags, selects materials, and outsources the manufacturing process.

A recent report published by Fortune Business Insights shows that the global handbag market size was USD 47.57 billion in 2020. The market is projected to grow from USD 49.63 billion in 2021 to USD 78.46 billion in 2028 at a CAGR of 6.7% in the 2021-2028 period. So also, the luxury handbag market size was valued at $58.3 billion in 2018 and is expected to reach $89.9 billion by 2026, registering a CAGR of 5.6% from 2019 to 2026.

Steps on How to Start a Handbag Line

  1. Conduct Market Research

The first step in the market research process for your handbag line is to develop market-based research questions in line with your overall business goal and objective.

In this regard, you should source information that will help you maximize your business, information that will give you reliable data of what your potential market will be looking out for from a handbag line, and also to help you operate your handbag line with less stress and of course, build the business to profitability within the shortest time frame.

a. Who is the Target Market for Handbag Line?

If you are thinking of opening a handbag line then you should make target demographics all-encompassing. It should include boutiques, bag stores, male and female, socialites, students, entrepreneurs, and every adult in the neighborhood where your handbag line will be located.

b. Is Handbag line a Profitable Business?

Yes, the handbag line business is quite profitable. As a matter of fact, a rise in working women globally is increasing sales of luxury handbags. A global increase in the population of working women is leading to more disposable income, and disposable income is always great for luxury fashion.

c. Are There Existing Niches in the Industry?

Yes, there are existing niches when it comes to handbag lines. Here are some of them;

  • Regular handbags (mass production)
  • Customized (craft) handbags
  • Luxury and high-end handbags.
d. Who are the Major Competitors?
  • LBU Inc.
  • GFG Bag Manufacturer
  • Clutch Made
  • Baikal Inc.
  • The Custom Bag Company
  • Portchester USA
  • Duro Bag, A Novolex Brand
  • Giggle Handbag
  • Rays Jade
  • Paul Mueller Company
  • Twin Oaks
  • D. Handbag Factory
  • Florence Leather Market
  • Niccoli Bags
  • Bellini
  • True Trident Leather
  • Hari Om Leather
  • Minh Ha Limited Company
  • The Rodon Group
  • GFG Bag Manufacturer.
e. Are There County or State Regulations or Zoning Laws for Handbag Line Business?

Yes, there are county or state regulations and zoning laws for handbag line businesses, and players in this industry are expected to work with the existing regulations governing such business in the county or state where the business is domiciled.

f. Is There a Franchise for Handbag Line Business?

Yes, there are franchise opportunities for handbag lines. Here are some of them;

  • Handbag Clinic International
  • Couture Traders
  • Prakriti Maitri.
g. What Do You Need to Start a Handbag Line Business?
  • A Feasibility Report
  • Business and Marketing Plans
  • Business Licenses and Permits
  • A Good Production Facility and Showroom
  • EIN (Employer Identification Number)/Federal Tax ID Number.
  • A Corporate Bank Account
  • Equipment, Machines, and Raw Materials
  • Employees
  • Startup and Working Capital
  1. Choose a Memorable Business Name

When looking to start a business, before you can begin to file the necessary documents with the constituted authorities or start your website, it is necessary that you come up with a name that you will be recognized with. It is essential that the name you come up with can easily be pronounced, is unique and easily memorable.
Some of the catchy business name ideas suitable for a handbag line business are;

  • Pinky Lady® Handbag Line, Inc.
  • Classic Woman® Handbag Line, Inc.
  • Bag Nation® Handbag Line, Inc.
  • Tina Couture™ Handbag Brands, Inc.
  • Esther Lane® Handbag Line, Inc.
  • Savannah Designs® Handbag Line, Inc.
  • Queen Esther® Luxury Handbag Line Company
  • Cynthia Martins® Handbag Line, LLC
  • High End® Luxury Handbag Line, Inc.
  • Nelly B® Handbag Line, Inc.
  • Ellen Taylor® Handbag Line, Inc.
  • Loisa ™ Handbag Line, LLC
  • Dora Decoster™ Handbag Line, Inc.
  • Broadway™ Handbag Line, LLC
  • Mariah Fernand® Handbag Line, Inc.
  • Julia Williams® Handbag Line, Inc.
  • M Clarissa© Handbag Line, Inc.
  • Georgina Paulson™ Handbag Line, LLC
  • Jill Newton™ Handbag Line, Inc.
  • Jay Leo® Handbag Brand, Inc.
  1. Register Your Business

a. What Type of Business Structure is Best for Handbag Line?

Even though there are several options when it comes to the business structure for a handbag line, the one that most players in this line of business consider is an LLC. It is common to consider an LLC because providers want to protect themselves from lawsuits.

Please note that an LLC will need an EIN if it has any employees or if it will be required to file any of the excise tax forms listed below. Most new single-member LLCs classified as disregarded entities will need to obtain an EIN.

b. Steps to Form an LLC
  • Choose a Name for Your LLC.
  • File Articles of Organization.
  • Choose a registered agent.
  • Decide on member vs. manager management.
  • Create an LLC operating agreement.
  • Comply with other tax and regulatory requirements.
  • File annual reports.
c. What Type of License is Needed to Open a Handbag Line?
  • General Business License
  • Seller’s Permit
  • Fire and Safety Permit (Fire certificates)
  • Federal Export Licenses
  • Zonal Permits
  • Signage Permit
  • State Occupational Licenses
  • Operational State Facility Inspections (Building Permits)
d. What Type of Certification is Needed to Open a Handbag Line?

You don’t need any certifications to open a handbag line.

e. What Documents are Needed to Open a Handbag Line?
  • DBA
  • EIN
  • Business and liability insurance
  • Federal Tax Payer’s ID
  • State Permit and Building Approval
  • Certificate of Incorporation
  • Business License
  • Business Plan
  • Employment Agreement (offer letters)
  • Operating Agreement for LLCs
  • Insurance Policy
  • Online Terms of Use
  • Online Privacy Policy Document
  • Contract Document
  • Company Bylaws
  • Memorandum of Understanding (MoU)
f. Do You Need a Trademark, Copyright, or Patent?

If you are considering starting a handbag line, usually you may need to file for intellectual property protection or trademark. This is so because the nature of the business makes it possible for you to challenge anybody in court for illegally making use of your company’s intellectual properties especially as it relates to your designs or logo et al.

  1. Cost Analysis and Budgeting

a. How Much Does It Cost to Start a Handbag Line?

When it comes to starting a handbag line, the startup costs vary and could range from $10,000 to over $500,000. This is so because the startup inventory and the equipment and machines needed to start either on a small or large scale will greatly influence the overall cost of starting the business.

b. What are the Costs Involved in Starting a Handbag Line
  • The Total Fee for Registering the Business in the United States of America – $750.
  • Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines, and other software) – $3,300.
  • Marketing promotion expenses for the grand opening of the handbag line – $3,580.
  • Insurance – $2,400.
  • Cost for payment of rent for 12 months at $1.76 per square foot in the total amount of $123,300.
  • Cost for facility remodeling (construction of racks and shelves) – $5,000.
  • Other start-up expenses include stationery ($500) and phone and utility deposits ($2,500).
  • Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000
  • The cost for equipping the production factory – $45,000
  • The cost for start-up inventory (materials, sewing supplies, packaging materials et al) – $55,000
  • Storage hardware (bins, rack, shelves, food case) – $3,720
  • Cost for store equipment (cash register, security, ventilation, signage) – $3,750
  • The cost for the purchase of furniture and gadgets – $7,000.
  • The cost of launching a website: $600
  • The cost for our opening party: $3,000
  • Miscellaneous: $5,000
c. What Factors Determine the Cost of Opening a Handbag Line?
  • The size of the handbag line
  • The choice of location
  • The required licenses and permits
  • The type of handbag line business (mass production or handmade)
  • The cost for branding, promotion, and marketing of the handbag business
  • The cost of furnishing and equipping the handbag production facility
  • The cost of the insurance policy covers
  • The cost of registering the business
  • Source of your supplies and ongoing expenses
  • Cost of recruiting and training your staff
  • The cost for the purchase and customizing of uniforms
  • The cost for the grand opening of the handbag line.
d. Do You Need to Build a Facility? If YES, How Much Will It Cost?

It is not compulsory to build a new facility for your handbag line, but if you have the required finance, it will pay you to build your own facility. The truth is that building or reconstructing a production facility for your handbag line will help you come up with a facility that will perfectly fit into your overall business goals and vision.

e. What are the Ongoing Expenses of a Handbag Line?
  • Rent and lease
  • Supplies and inventory (materials, sewing supplies, and packaging supplies et al)
  • Utility bills (internet subscriptions, phone bills, signage, and software renewal fees et al)
  • Maintenance of machines
  • Salaries of employees
f. What is the Average Salary of your Staff?
  • Chief Executive Officer (President) – $55,000 Per Year
  • Factory Manager – $35,000 Per Year
  • Merchandise Manager – $32,630,000 Per Year
  • Handbag Designers – $32,000 Per Year
  • Accountant (Cashier) – $30,500 Per Year
  • Marketing and Sales Executives – $28,000 Per Year
  • Tailors (Bag Makers) – $26,100 Per Year
  • Customer Service Executive – $26,000 Per Year
  • Security Guard -$24,000 Per Year
g. How Do You Get Funding to Start a Handbag Line?
  • Raising money from personal savings and sale of personal stocks and properties
  • Raising money from investors and business partners
  • Sell shares to interested investors
  • Applying for a loan from your bank/banks
  • Pitching your business idea and applying for business grants and seed funding from the government, donor organizations, and angel investors
  • Source for soft loans from your family members and friends.
  1. Write a Business Plan

a. Executive Summary

TM Clarrisa™ Handbag Line, LLC is a registered handbag line that will be located in an industrial area in Fort Wayne, Indiana. We have been able to secure a long-term lease agreement for a facility in a strategic location with an option of a long-term renewal on terms and conditions that are favorable to us. The facility has government approval for the kind of business we want to run and it is easily accessible.

b. Products and Service
  • Regular handbags (mass production)
  • Customized (handmade craft) handbags
  • Luxury and high-end handbags
c. Mission Statement

Our mission is to build a highly successful handbag line whose brand will be known all around key cities in the United States of America and around the globe.

Vision Statement

Our vision is to be among the top 20 handbag lines in the world.

d. Goals and Objectives

The goals and objectives of a handbag line are to produce different types and designs of handbags for the general public.

e. Organizational Structure
  • Chief Executive Officer (President)
  • Factory Manager
  • Merchandise Manager
  • Handbag Designers
  • Accountant (Cashier)
  • Marketing and Sales Executives
  • Tailors (Handbag Makers)
  • Customer Services Executives
  • Security Guard

Marketing Plan

a. SWOT Analysis
Strength
  • Ideal location for a handbag production business
  • Highly experienced and qualified employees and management
  • Access to finance from business partners
  • Excellent customer testimonials.
  • Unique design and styles
Weakness
  • Financial Constraints
  • A new business that will be competing with well-established handbag brands.
  • Inability to retain our highly experienced and qualified employees longer than we want
Opportunities
  • A rise in working women globally is increasing sales of luxury handbags. A global increase in the population of working women is leading to more disposable income, and disposable income is always great for luxury fashion.
  • Online market, new services, new technology, and of course the opening of new markets
  • Increase the number of the human population within our target market area.
Threats
  • The arrival of a new handbag line within our market space
  • Unfavorable government policy and regulations.
  • Steady wage expenses and increasing prices of gas
  • Economic uncertainty
  • Liability problems
b. How Do Handbag Lines Make Money?

Handbag lines make money by selling a wide range of handbags.

c. Payment Options
  • Payment via bank transfer
  • Payment with cash
  • Payment via credit cards
  • Payment via online bank transfer
  • Payment via check
  • Payment via mobile money transfer
d. Sales & Advertising Strategies
  • Place adverts on both print (newspapers and fashion magazines) and electronic media platforms
  • Sponsor relevant community-based events / programs
  • Leverage the internet and social media platforms like; Pinterest, Instagram, Facebook, Twitter, YouTube, Google + et al to promote your products
  • Install your Bill Boards in strategic locations all around your city or state
  • Distribute your fliers and handbills to target areas
  • List your handbag line in local directories / yellow pages
  • Advertise your handbag line on your official website and employ strategies that will help you pull traffic to the site.
  • Position your Flexi Banners at strategic positions in the location where your handbag line is located.
  • Ensure that all your staff members wear your branded shirts and that all your vehicles and trucks/vans are branded with your company logo.

Financial Projection

a. How Much Should You Charge for your Product/Service?

The price of handbags depends on the type, size, and brand of the product.

b. How Much Profit Do Handbag Line Owners Make a Year?

It depends, but the available report shows that the national average earnings for handbag line owners are approximately $51,000 per year. Handbag line profits can average between $23,751 and $140,935, depending on your location, line specifics, expenses, marketing efforts, and company size.

c. What Factors Determine the Amount of Profit to Be Made?
  • The capacity of the handbag line
  • The location the handbag line is covering (online or strictly brick and mortar)
  • The management style of the handbag line
  • The business approach of the handbag line
  • The advertising and marketing strategies adopted by the handbag line.
  • The number of years the handbag line is in business
d. What is the Profit Margin of a Handbag Line?

Handbag lines gain a handful of profit on all products. Margins usually range from 20% to around 60-70%. So, the revenue you would be making will be based on sales made by you monthly and the expenses that you incur while running the business.

e. What is the Sales Forecast?
  • First Fiscal Year (FY1): $340,000
  • Second Fiscal Year (FY2): $550,000
  • Third Fiscal Year (FY3): $950,000
  1. Set Up your Shop 

a. How Do You Choose a Perfect Location for Handbag Line?
  • The demography of the location
  • The demand for handbags in the location
  • The purchasing power of businesses and residents of the location
  • Accessibility of the location
  • The number of handbag lines and other fashion outlets in the location
  • The local laws and regulations in the community/state
  • Traffic, parking and security et al
b. What State and City are Best to Open a Handbag Line?
  • Las Vegas, Nevada
  • Los Angeles, California
  • Chicago, Illinois
  • Boston, Massachusetts
  • Silver Spring, Maryland
  • Rowland Heights, California
  • Portland, Oregon
  • New York City, New York
  • Atlanta, Georgia
  • Dallas, Texas
c. What Equipment is Needed to Operate a Handbag Line?
  • Industrial sewing machines
  • Pattern makers for crafting designs.
  • Scissors
  • Hole punchers
  • Straight and curved rulers
  • Pencils
  • Measuring tapes
  • Notchers for marking seams.
  • Pins
  • Slopers
  • Dotted pattern paper.
  • Sewing machine needles
  • Hand sewing needles.
  • Threads
  • Sketching books.
  • Drapings tools.
  • Bagmaking Stick pins
  • Muslin
  • Style tapes
  • Leather shears
  • Soft lead pencil
  • Marking pen
  • Pattern plotter.
  • Pattern-making software.
  • Computer
  • CAD tools for designs
  • Digital drawing tools
  • Digitizer board for pattern scanning.
  • Heat transfer machines
  • Print tables.
  • Hangers
  • Labels and Tags.
  • Packaging materials
  • Supply of bag materials
  1. Hire Employees

When it comes to hiring employees for a standard handbag line, you should make plans to hire a competent chief executive officer (president), factory manager, merchandise manager, accountant (cashier), marketing and sales executives, and tailors (handbag makers), handbag designers and security guard.

  1. Launch the Business Proper

No handbag line opens its door for business without first organizing an opening party to officially launch the business. You can choose to do a soft opening party if you are operating on a low budget or you can go for a grand opening party.

The bottom line is that with a proper launching of the handbag line, you will officially inform people in your city that your handbag line is open for business.

a. What Makes a Handbag line Business Successful?
  • Choose a good location and showroom facility to launch the business
  • Make sure your handbags are unique and the finishing is topnotch
  • Be deliberate with your marketing sales approach
  • Encourage the use of word of mouth to promote your handbag line business
  • Leverage all available online and offline platforms to promote your handbag line
b. What Happens During a Typical Day at a Handbag Line?
  • The production factory is open for the day’s work
  • The facility is cleaned and well-arranged
  • Factory swing into action (production of handbags)
  • Deliveries of orders are made
  • Stocks are taken and reports are written and submitted to superior officers
  • The business is closed for the day.
c. What Skills and Experience Do You Need to Build a Handbag Line?
  • Good handbag and fashion design sense
  • Excellent tailoring and bag-making skills
  • Excellent customer services skills
  • Interpersonal skill
  • Accounting and bookkeeping skills
  • Business management skills
  • Bargaining and bidding skills
  • Work experience in a handbag line environment
  • Experience in managing people
  • Experience in business administration.