Handbag Manufacturing Business Cost, Requirements, Profit, How To Start | ChildArticle

Handbag Manufacturing Business Cost, Requirements, Profit, How To Start | ChildArticle

The growth of the handbag manufacturing business in India is because handbags have become an essential accessory in the fashion world and are often considered critical elements for a woman’s fashion and wardrobe. Handbags are used as bags or purses that come in various sizes and are a product of specific fashion designs. Those employed with this industry are designers and manufacturers of handbags and specialty retailers whose primary market is selling bags through multiple sources.

They enhance growth in the fashion industry and employ a large number of people. In the current scenario, designers include handbags in their collection more often to increase the revenue.

The fashion market has a direct and significant impact on the different designs that come out of the handbag industry, as one compliment the other. Since several designers have started to open their stores, competition in this industry of handbag manufacturing business has peaked.

Handbag companies will sell not only their designer pieces but luxury brands and private labels as well. Many countries’ designers are on the peak in their creation and distribution of handbags with new strategies and initiatives. Handbag manufacturing businesses are also adjusting their distribution patterns to grow effectively & cater to their consumer’s needs and reduce their operational costs.

Handbag Manufacturing Business: Market Potential

Manufacturing handbags are a significant business venture to start right from the comforts of home, as not only this business can run on a part-time basis, but there are almost nil operating overheads to bite into monthly profits. Indian consumers are increasingly becoming day-to-day conscious about their consumption choices in accessories, especially those that reflect their style and personality. Hence, the handbag manufacturing business in India has witnessed a significant evolution in the recent past.

  • The handbag manufacturing business and accessories segment has shifted from being a mere necessity purchase to gaining a foothold in the lifestyle shopping category.
  • A tremendous increase in the growth of e-commerce, with online shopping facilities, is also expected to contribute magnificently to the retail market’s development in the coming few years.
  • Experts do believe that the industry revenue will grow and thrive at an annualized 2.2% over the five years through 2016 at $95.5 billion.
  • The handbag manufacturing business has attracted entrepreneurs with its increased revenue in recent years due to mergers and consolidation among sectors. Research has also shown that the concentration might increase slightly in future years as this trend continues in a saturated and mature industry.
  • It is believed that the demand for handbags and accessories will rise in the coming years as conditions in the global economy strengthened. Also note that as and when the disposable income grows and consumer sentiment recovers, consumers will make purchases they postponed for the future.

Apart from the local demand for handbags, few handbags are ideal for export purposes. A handcrafted bag is exceptionally prominent around the globe and is a major attraction for the outsiders. Hence, it contributes immensely to exporting goods.

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Types of Handbags Prominent in the Market

Your idea needs to be desirable and innovative to succeed in this business, which means that you need to have a target and selling point; that’s why it is advisable to conduct trend/market research when designing to ensure that there is a customer for your product. Once you trace a gap in the market, you will get a better understanding of the type of work you should try create for the customers. You can decide on making normal bags and sell them, or you can also choose to design particular bags. They may include:

  • Tote bags
  • Sling bags
  • Bucket bag
  • Barrel
  • Half-moon
  • Doctor’s bag
  • Hobo
  • Saddle
  • Pouch
  • Clutch
  • Trapezoid
  • Wristlet
  • Messenger Bag
  • Kiondo, etc.

The Technical Aspects of Handbag Manufacturing Business

Manufacturing handbags might sound simple, but it isn’t a cakewalk as it sounds. There are various steps and aspects involved in the process of handbag manufacturing business. Due to this ease of doing business, most rural and urban crowds opted, but several technicalities were involved in the entire process. Let’s have a look at each one of it:

Qualified Business Plan

  • A business plan helps you take a good idea and turn it into a concrete plan. Detailed market research analysis, considering the current budget and handbag market size and customer demographics, must start with the business.
  • The business plan must include a financial detailing and an overall estimate of running the industry, including the expected revenue stream. Including a section on business strategy and marketing plan is a must to run a successful handbag manufacturing business.
  • Effective planning of handbag manufacturing business goes a long way. Much thought is required to be given to each aspect of the business plan to avoid any miss-happening.

Establish it as a Legal Entity

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  • While considering the legal foundation and the route of your handbag manufacturing business, entrepreneurs can go for anyone of two viable options – sole proprietorship and the LLC.
  • To properly understand the tax liabilities for each, it is essential to understand these terms’ definitions. The sole proprietor business structure is, as the name suggests, a company with a single/sole owner. The maximum entrepreneurs of all businesses use this structure.
  • It keeps the owner under the control of the company. It has the simplest setup-while the limited liability corporation is often formed for partnerships when the business has grown significantly.
  • Instead, many people would create an LLC than a sole proprietorship because of liability issues, but it requires money to prepare the incorporation articles. Most people also prefer franchisee option these days.

Choosing a Proper Location for Handbag Business

If you plan to open a physical storefront, choosing the right place gives you the best result for early success. Make sure to research multiple locations before settling down for one properly, keeping in mind the availability of electricity, space, safety, etc.

Necessary Licenses and Permits

There are various licenses and registrations required to carry on India’s handbag manufacturing business. The first one is company registration, next is GST registration, Udyog aadhar registration for availing benefits of government schemes, and import-export code if the business is involved in export business. Other general permits and licenses are also required to ensure easy business operations comply with all legal necessities.

Financing Sources

  • Handbag manufacturing business can be carried on with light investment, but for that, one cannot only rely on its fund.
  • There has to be a different source to finance your business, especially if it’s a startup. Funds will be able to finance the manufacturing and buying of all necessary equipment.
  • There are many ways in the current scenario by which you can invest your business; some sources are bank loans, crowdfunding, investor, partnership, etc.
  • Many Government schemes promote MSMEs and their day to day business activities by lending them at low or free collateral loans (under Aatmnirbhar Bharat Abhiyan).

Raw Materials and Equipment

Raw materials and equipment to be chosen wisely, keeping in mind the quality, cost, and demand of it in the current scenario. Though raw materials and machinery depend from bag to bag, yet there are few raw materials and equipment required by all bag business entrepreneurs such as:

  • Sewing machine
  • Finely adjustable zipper foot
  • Ironing cloth
  • Finger presser
  • A sleeve ironing board
  • Tabletop ironing board
  • Travel Iron with steam function
  • Fine sewing scissors and dressmaking shears
  • Pinking shears
  • Strong fabric glue
  • Long dressmaking pins
  • Sewing clips
  • 1/4in Basting tape
  • Loop turner
  • Dot
  • Laces
  • Tags
  • Polyester stereo
  • Chemicals for coloring
  • Lace fitting machines, etc.
  • Tape measure
  • Pliers for purse chain and metal rings
  • Tailor’s tapered awl
  • Cutting mat for rotary cutter

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The Manufacturing Process

The process of manufacturing bags differs from one handbag to another. There is no specified protocol for handbag manufacturing, as it may vary in its type and quality. The operations may vary with the use of different machines and the variety you are manufacturing. After manufacturing, the bag is packed for selling.

Marketing Strategy

  • A well-crafted marketing plan is a simple document that gives a clear view of what you want to acquire or achieve in your business with the required financial resources necessary to achieve the company’s objectives and targets.
  • The well-planned promotional approach taken from the marketing plan determines your handbag business’s success or failure.
  • Multiple methods to market your handbag manufacturing business may include: creating one attractive website, business networking, and partnership, referrals, promoting on social media platforms and traditional advertising strategies, marketing materials, satisfying customer testimonies.
  • Handbags are sold in various places, and the venue you choose depends on how much money you have in your pocket to start your bag manufacturing company.
  • The cheapest handbag manufacturing selling venues include markets, e-commerce stores, online websites, online artisan marketplaces, and craft shows or exhibitions.


In the current scenario, starting a handbag manufacturing business is a promising industry for the budding entrepreneurs realizing its ease of making business and the low investment that triggers most of the entrepreneurs’ interests towards this industry. The government support and schemes in favor of the same have motivated many handbag manufacturers to approach the same path to achieve their targets and fulfill their dreams. Apart from this, there has been significant participation of women community in this regard. The women handbags market in India has been estimated at Rs 3600 crore. It shall grow at about 15 percent annually in the next five years to Rs 6,000 crore. The key growth drivers are the increasing number of working women, rising incomes, increasing fashion consciousness & aspiration levels, and handbags brands’ growing ingress.

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