How To Start a Handbag Business from Home

by Temiloluwa Alagbe
186 views 5 minutes read
A handbag business displaying their products

Starting a handbag business from home is an excellent way to express your creativity while earning some extra cash. In addition to allowing you to express your passion, a home-based handbag business is also an efficient way of cutting costs. In this article, we delve into the promising industry that is the handbag business as we discuss how to maximize profit from the comfort of our homes.

Overview of the Handbag Industry

The handbag industry is a sub-sector of the fashion industry and is a key part of the fashion world. The industry has an estimated value of over $49 billion with a compound annual growth rate of 6.7% from 2021 – 2028. This rapidly growing industry is expected to hit a global demand of $81.79 billion by 2030. The rising disposable incomes of individuals, evolving fashion trends, and the convenience of online shopping are key contributors to the growth of the handbag industry.

Is The Handbag Business Profitable?

The handbag business is highly profitable mainly because of its high global demand. Because of its profitability, however, it is important to note that it is also highly competitive. Nonetheless, this should be no cause for alarm because, with the right marketing and sales strategy, you are sure to rise above the competition.

Why Start a Handbag Business from Home?

There are many reasons to start a handbag business from home. Some of them include:

  • It’s relatively low start-up costs.
  • The business allows for flexible work schedules.
  • Reduced overhead costs as you don’t have to worry about additional location fees.
  • The business has the potential to make you a lot of money.
  • Room for business growth.

How Much Does it Cost to Start a Handbag Line?

A handbag line typically consists of a minimum of 5 bags and a limitless maximum number. Because the production of a bag can cost up to $2,000, launching a handbag line can cost between $10,000 – $50,000, depending on the size of the handbag line and the materials used in creating the handbags.

Cost of Starting a Handbag Business from Home

1. Legal costs

There are some licenses you would need to get before you can legally operate a home-based handbag business. Some of them include:

i) Business license

A business license is a basic requirement for starting any kind of business as it confirms the legal compliance of your business and improves the credibility of your business. Depending on your locality, there may be other licenses you may need to acquire before you can apply for a business license. The application processes may be different in each state but it generally involves getting an employer identification number, obtaining the necessary licenses, and paying an application fee. Getting a business license typically costs between $100 – $300.

ii) Seller’s permit

You will need to get a seller’s permit in order to sell manufactured handbags. The process of obtaining a seller’s permit typically involves submitting an application and paying applicable fees. However, you must note that you need to have a business license to be eligible for a seller’s permit. The cost of getting a seller’s permit is usually between $50 – $100.

iii) Zoning permit

Because you want to use your home for residential and commercial purposes, you need a zoning permit. This permit ensures that your home complies with the state’s zoning laws. Obtaining a zoning permit involves submitting an application after reviewing the state zoning laws, paying applicable fees, and scheduling an inspection. The cost of getting a zoning permit ranges between $50 – $150.

2. Equipment and materials costs

The cost of getting materials and equipment for a home-based handbag business depends on the materials you choose to use for the handbags and the grade of equipment purchased. Generally, you should expect to spend between $1,000 – $2,000.

3. Workspace costs

You need to have a designated work area in your home so that you can boost your productivity levels. The cost of setting up a workspace is highly dependent on your tastes and how much capital is at your disposal. However, you should expect to spend between $500 – $3,000 on setting up a workspace.

4. Insurance costs

Whether you run a home-based business, an online business, or a traditional business, it is important to secure it from risk. The cost of getting your business insured depends on your insurance plan but we can tell you that you should expect to spend between $100 – $500 on insurance annually.

5. Promotion and marketing costs

You may choose to spend on promotion and marketing and you may not. Be that as it may, you need to choose promotional and marketing strategies that produce the best result. The best promotional strategies don’t always have to cost money but there’s no such thing as too much PR. As long as your budget can accommodate it, it is not a bad idea to pay for a little extra publicity.

Best Countries to Start a Handbag Business from Home

1. Italy

Italy is a country with a strong reputation for producing high-quality fashion materials. In addition to having strong brand recognition worldwide, the country also offers national and regional grants and incentives to handbag businesses to help them grow.

i)Nuove Impresse

Funded by the Ministry of Economic Development, this grant programme provides funds of up to €25,000 to new businesses established in Italy. To qualify for this grant, your home-based handbag business needs to have a foolproof business plan and demonstrate financial viability.

ii) Self-Employment Allowance

The National Society Security Institute organizes this funding for self-employed individuals. For your home-based handbag business to qualify for this grant, the registered business needs to have been operational for more than two years and you should have a gross annual income of €35,000. You also need to be an Italian resident.

iii) Toscana Crea

This regional grant programme provides funding of up to €10,000 to new businesses in Tuscany. In order to qualify for this programme, your business needs to be registered, based in Tuscany, operational for less than two years, and have a business plan that demonstrates financial viability.

2. China

China has a strong e-commerce infrastructure which is an advantage for home-based businesses. Furthermore, the country’s established manufacturing industry offers access to a wide range of materials while also providing affordable labour. China also offers e-commerce incentives for start-ups and tax breaks for innovative entrepreneurs. In addition to this, there are also some grant programmes applicable in China.

3. The United States

The United States of America has a diverse domestic market with a strong demand for handbags. The country also has a developed e-commerce infrastructure, thus, making it easier for home-based businesses to operate.

i) Small Business Innovation Research Grant

This funding provides up to $250,000 to US-based small businesses. To qualify for this grant, you need to have a viable business plan that demonstrates the possible commercialization of your innovative products.

ii) USDA Rural Business Development Grants

This grant programme provides funding of up to $250,000 to small businesses located in rural areas. The eligibility requirements for this grant include a clear business plan and a demonstration of the potential for job creation and economic development.

4. India

India offers high-quality materials at relatively low costs with skilled artisans and a growing domestic market. The country is also experiencing a growing demand for handbags and with the increasing disposable income of consumers, your business has the potential to have a large customer base.

5. Portugal

Portugal is also known for high-quality leather products. The country also has the added advantage of being a part of the European Union which makes it easier for your business to grow on a global scale. Portugal also has a growing demand for handbags and the country’s strong e-commerce sector makes it easy for you to sell your handbags to consumers.

How to Start a Handbag Business from Home

1. Conduct market research

The first and most important step in starting a business is to conduct market research. This is because thoroughly researching your target audience helps you understand their needs, thus, making it possible for you to come up with the best ways to meet those needs.

2. Draft a business plan

After you have come up with your product design, you need to create a business plan that will help you make the most of selling your new, innovative product. A business plan is another key part of the success of a business, even if it is home-based, as it helps you plan for any possible occurrence. The viability of your business plan can also help you get the funding to expand your business if you so please.

3. Build an online presence

As a home-based business, you need to use the online world to your advantage. While your business is still in the planning phase, start working on increasing your online visibility. This way you wouldn’t have to start from scratch when your business is ready to launch.

4. Develop creative designs

With the information you have gotten from your market research, come up with a design that is both beautiful and practical. Your design should be unique and you need to remember that your selling point is the practicality of your design. Aesthetics should not be the sole aim of your design. You can create prototypes to test out your designs.

5. Source for materials

Once you are satisfied with your designs and their prototypes, you can begin to search for materials that will be best suited to your design. Note that the quality of these materials is of utmost importance.

6. Set up a production process

You begin this step by ensuring that your workspace is conducive and meets all the safety standards. This way you will significantly increase your productivity. The next thing to do is to come up with a production schedule and process that fits in with your lifestyle. In other words, come up with a work schedule that you find suitable.

7. Implement marketing and promotional strategies

Immediately production begins, you should begin to advertise your business while implementing marketing strategies. Some effective marketing strategies include offering bonuses, discounts, and freebies and some effective promotional strategies include video content creation, social media marketing, and blogging.

How to Start a Handbag Business from Home with No Money

On the other hand, you can decide to start a home-based handbag business by reselling already manufactured handbags. However, the only way to start a handbag business from home with zero costs is by dropshipping handbags. Here’s how to start a home-based handbag business by reselling bags.

1. Conduct market research

It is still important to find out your target market’s needs, how to meet these needs, and the best way to get across to your target market and all this can be accomplished by conducting market research.

2. Draft a business plan

Yes, you still need a business plan to resell handbags for all the reasons we have stated earlier.

3. Build a strong online presence

The importance of a strong online presence, especially for home-based businesses cannot be overemphasized. Because it takes time to build an online presence, you need to start early.

4. Source for suppliers

The advantage of reselling handbags is that you don’t have to stick with one supplier. You can source different bag designs from different suppliers, including thrift stores, as long as they are of high quality. Remember that an essential part of starting a successful handbag business is to never compromise on quality.

5. Implement pricing strategies

After purchasing all the bags you need to resell, you must come up with an effective pricing strategy that is both affordable and profitable. This implies that your sole purpose while setting prices cannot be profit. You must consider the purchasing power of your target market too.

6. Implement promotional and marketing strategies

Once you have purchased the bags and put a consumer-friendly price on all of them, you can begin to promote your business. There are several marketing strategies that you can implement but you need to choose the ones that will produce the best results. This information can be obtained from the results of your market research. For promotional strategies, we recommend that you focus on digital marketing strategies. However, this does not mean you should neglect other customer acquisition strategies.

How to Start a Successful Handbag Business from Home

1. Don’t compromise on quality

Whether you are producing the handbags you sell, reselling handbags, or even dropshipping them, selling high-quality handbags is of utmost importance. Selling low-quality only provides short-term success. For long-term results, focus on high-quality products, irrespective of the costs.

2. Create a website for your business

Because your place of business is also a residential area, it may not be the best idea to have too many people visiting your home. For this reason, your home-based business should have an e-commerce channel. While you may not operate strictly online, you should have a platform where online purchases can be made.

3. Provide excellent service

The key to your business’s success is selling high-quality products while providing excellent service. Your website should also be easy to use, ensuring smooth communications and transactions between the buyer and the seller.

4. Embrace creativity

By this, we mean that you should constantly come up with new designs. If your brand is known for always selling the same designs, people will grow bored of it. For this reason, whether you are manufacturing your bags or getting them from a supplier, you need to constantly have new stuff up for sale.

5. Don’t be quiet about your business

You need to wear your business like a badge as this is another highly effective business. Constantly talking about your business increases the likelihood of people also talking about and this can significantly increase your customer base. This is why you should always find ways to bring up your business in every conversation you are involved in, both online and offline.

6. Be patient

Good things take time. This is why you should give yourself time to grow. Avoid comparing yourself to other successful handbag businesses because they have put in the time and effort. Keep moving at your own pace and in a couple of years, you will be astonished at the heights you and your business have attained.

Handbag Business Plan PDF Templates

Provided below is a list of PDF templates to serve as a guide to drafting the business plan for your handbag business.


The convenience of the home-based handbag business makes it an alluring business idea and for this reason, it can be quite competitive. However, it is possible to start a profitable home-based handbag business, despite of the competition, as long as you have the right information. Fortunately, this article has provided you with all the information you need. All that’s left is for you to put that information to good use and make waves in the fashion industry. We’re rooting for you, young entrepreneur.

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