How to Start a Small Leather Bag Making Business in – Costs, Profits, ROI | StartupYo


How to Start a Small Leather Bag Making Business

Every passing year, we see different designs and brands of Leather Bags in the market. People having a passion for fashion designing keep on offering the consumers with innovative and attractive designs. If we talk about a small Leather Bag making business, the investment cost is very low and the raw materials which are required for carrying on the process of manufacturing are easily available, as most of them are synthetic material. This is but just one of the factors that are advantageous for starting a small leather bag making business.


The first and foremost decisive factor for starting a new business is to understand the concerned industry that you are getting into. With regard to Leather bags, there is a wide range of variety and designs that are and can be explored by businesses. They range from Laptop bags, handbags, Purse, wallets, and so on, this gives a greater exposure and a greater field of expansion to deal with.  
Having the numbers in your mind boosts your dedication for starting your business right away. The leather or clothing accessories amount to more than 41 Million $ in the market. This clearly explains the scope and the potential which this industry has, we as an individual are just discussing and exploring a part of this segment which again accounts for a huge percentage of sales and profits. 
Considering the demand of people regarding leather items and the artistic work and design that it carries, it amounts to a huge scope. According to reports, leather bags or other leather items also reaches international market demands by exporting the same into various other countries. Let us dwell deeper into all the details related to the Leather bag making business.

License Required for Leather Bags Making Business
  • GST Registration
  • Firm Registration
  • Trade License
  • Current Account
  • IEC Code
  • Trade Mark
Investment required For Leather Bag Making Business

Although the raw materials that are required for making Leather Bags are easily available and obtained, this lowers your investment cost to some extent in this field. However, most of it would depend on the types of design and artistic work that you plan for. The estimate of the investment required is as follows.

Small Scale 8 to 12 lakhs
Medium Scale 12 to 20 lakhs
Expected Profits that can be Made from Small Leather Bag Making business

An average amount of Profit that can be earned by individuals engaged in Leather Bag Making business would go between 50,000 to 1.2 lakhs, depending highly on the demand that has been generated, the market which has been acquired, and the brand value that has been created by your business.

Raw Materials Required for Leather Making Business

A. Cloth 
B. Silk Lining Cloth 
C. Tanned Goat leather 
D. Threads 
E. Popline Lining Cloth  
F. Decorative 
G. Adhesives 
H. Zip, buttons  
I. Other Synthetic materials

Equipment Required

Most of your investment would be spent on acquiring the various types of machines that are necessary for manufacturing Leather bags. However, according to the different types of bags you would require different machines that are mentioned below. 
A. Skiving Machine 
B. Cutting Machine 
C. Snap Button 
D. Hook Attach machine 
E. Die cutting Machine 
F. Mini Compressor 
G. Ball Press machine  
H. Board Cutting Machine 
I. Zinc Bloc  
J. Miscellaneous Equipment

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Manpower Required
  • The Manpower that would be necessary for a leather Bag Making business would vary depending on the types of products you manufacture. If you manufacture multiple products together, you would require even more manpower than necessary.
  • The manpower required to set up a small-scale Leather Bag making business would be around; 2 skilled workers and a manager, and if you have less knowledge about design, then even a design controller.
  • The manpower required for a medium or a large-scale Leather bag making business would be 3 to 4 skilled workers, a manager, and a design handler or controller. Again, the number of workers would vary depending on the multiple products that you are manufacturing.

Target Consumers

Gift shops: This is a major spot where your leather made bags, wallets, and purse would be sold at a great number. People usually make a purchase of these products as a gift from various gift shops. Once you have acquainted with gift shop owners, they can be your regular customer. 
Stores in Malls: There are some small or major stores in malls, that store such leather products with a distinguished and unique design in their stores. The sales that you make in these stores would not be quite frequent, but the profit percentage would be high. However, you would have to develop some brand value to have your leather products displayed here. 
Local Bag stores: You can tie-up or approach all the local stores that are dedicated entirely to bags and leather-related products. Here, once again, they would agree better if the designs of your product are good and eye-catchy for a customer.  
Exhibitions: You can display your new range of brands at exhibitions. Exhibitions are a really great place to start off for a new brand, you can showcase your wide range of products at these exhibitions and create some initial level customers.  
Boutiques and Fashion Stores: Lastly, another one of your major targets should be the local or the regional boutiques and Fashion stores. They would promote and sell your product in their stores for a good commission rate. You just have to create an impression and build confidence in your product in their minds.

Profit Margin

In the Leather Bag Manufacturing business, depending on the type of bag that you are manufacturing and selling, the profit margin would differ. However, considering a usual Leather bag, you can easily expect to earn a profit margin or percentage that lies in the range of 20% to 35%. The numbers may vary, depending on the product.

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