Practical Ecommerce

Lessons Learned: Selling Specialty Handbags Expensive

Las Vegas-based business duo Christopher Nelson and Tamara Leuty created patented designer handbags with built-in lights that enable you to see what’s inside. Then they started a business — Glass Handbag — in late 2010. They received U.S. and international patents for their invention. They found suitable designers and suppliers. And they launched an attractive ecommerce site to sell their products.

That’s the good news.

The bad news is that the partners have spent $500,000 on it all and have sold just 100 handbags, for roughly $15,000 in revenue. It’s an expensive lesson, in other words. But fortunately for us, they’ve agreed to share their experiences. And, admirably, they aren’t giving up.

Christopher Nelson and Tamara Leuty.

Christopher Nelson and Tamara Leuty.

As well as having a successful career as a real estate appraiser, Nelson is a serial entrepreneur. “I have started a few small businesses since I was 12 when I sold knickknacks to my relatives.”

Despite his experience in knowing that new products are difficult to market, Nelson says their lessons in creating and marketing their unique handbag have been expensive ones.

In 2010 Leuty began to invent a handbag with an integrated light system, which she said people have been trying to create since the 1950s.

“Tamara tried to find suppliers in the U.S. but none would return her phone calls nor be friendly about giving estimates and signing non-disclosure agreements.”

But she persevered. She created designs, found suppliers, and got a prototype in 2011. She sold the first Glass Handbag product in December 2011.

In 2012 Glass Handbag was granted an international patent from WIPO — World Intellectual Property Organization — and it is about to receive the U.S. patent, which has been published but which is not yet official.

Shopping Carts, Order Management and Hosting

The company launched GlassHandbag.com in June 2011 with Volusion, the hosted shopping cart. Nelson is pleased with Volusion’s all-inclusive model.

“Volusion integrates payment systems, order management and hosting. We have been happy with them for the last year. With custom designing available, there are always more options for the website. For example, Tamara would like a sliding-picture home page.”

Credit Card Payments

For his payment gateway, Nelson uses Authorize.Net because it is compatible with Volusion. But he is no fan of credit card processing companies generally, beyond payment gateways.

“They’re pure evil: they hold you to contracts and sneak them in, even when you don’t need them. They always have extra fees and typically charge a great deal even if they say they are the cheapest.”

Glass Handbag offers payment via PayPal, MasterCard, Visa, and Discover. It added Square in July 2012 so buyers can purchase the handbags on their mobile phones.

Search Engine Optimization

Nelson said Glass Handbag has tried Volusion’s search engine optimization service and, also, the services of Orange Soda, a consulting firm. But has had minimal luck to date.

“They say you have to give it six months to work. I am not sure I believe this, but we are using SEO services from Visible.net] [a shopping cart and marketing firm] at the moment.”

Shipping

Leuty and Nelson send Glass Handbag’s products via USPS and FedEx.

Accounting Software

Glass Handbag uses the online version of QuickBooks, which Nelson said is helpful, versus the installed software version.

Social Media

Glass Handbag appears on Google+, Facebook, Twitter, YouTube, LinkedIn, and Pinterest.

Nelson uses HootSuite — the social-media management platform — for Twitter and Facebook, posting twice weekly, and promoting the company and handbag sales in only about 20 to 40 percent of the posts.

“Otherwise your followers get sick of you selling products all the time.”

Customer Service

Nelson said he and Leuty don’t have much customer service experience yet as their product has not taken off. But when it does, he will utilize an outsourced order fulfillment facility.

Glass Handbag has patents for the function of their handbag lights.

Glass Handbag has patents for the function of their handbag lights.

Biggest Mistakes

Nelson cites four mistakes.

“The biggest mistake was spending $10,000 on a Yahoo! email advertising campaign that lasted only one month and brought no sales — yes, zero sales. A total waste of money.”

Print advertising has proved equally disappointing.

“We paid $6,000 per month for a full-page ad in our local high class magazine, VEGAS, for three months with minimal results and no sales.”

The pair received photo coverage with celebrities from the television show Dancing with the Stars. But Nelson believes this wasn’t worth the $5,000 fee for celebrity photos.

Finally, they also regretted getting a bricks-and-mortar showroom in Las Vegas too soon.

“We tried a retail location for about seven months — from July 2011 to February 2012 — and lost about $70,000. It wasn’t for us, [it was] too expensive to keep up and get traffic there.”

Since then, the pair have concentrated their efforts and resources on getting traffic to the website.

Biggest Successes

Nelson cites five big successes for Glass Handbag.

The first was that the unique designer handbags. Nelson and Leuty appeared on a three-minute segment on nationwide television show, Better TV. Secondly, they were featured for 2 to 3 minutes with the local Fox news television show.

“The third is getting our first patent published. The fourth is that, really, everyone who sees the product, loves it.”

However, the biggest success of all is their recent contract with CBS for its daily game show, The Price Is Right, allowing the product on air for up to 2 times per month for a 12 month period.

Elizabeth Ball
Elizabeth Ball
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Comments ( 10 )

  1. Richard Stubbings September 6, 2012 Reply

    Is there actually a demand for such bags?

  2. Elizabeth Ball September 6, 2012 Reply

    Oh Richard, you’re obviously not a woman! I’m sure you’ve seen your mother, grandmother, sister, wife or girlfriend or female colleague scrabble through her handbag (which invariably, feature black lining inside, making it impossible to see, especially in the dark, or dim lighting) trying to find something in there. It’s a great idea and the bags are classic designs – love the snakeskin! I think they should concentrate their marketing spend on PR with the fashion and lifestyle magazines. I also see this getting a lot of attention in a movie with product placement.

  3. Alison Wren September 7, 2012 Reply

    To me this is a classic case of retailing when you should be wholesaling – concentrate on getting the product into the right stores and leaving the selling side (online and B&M) to the experts. And yes, PR is vital for this kind of product.

  4. Matt Sharper September 7, 2012 Reply

    no richard your thinking is right there is not a big enough demand for bags with lights in them…

    they dont need more pr or to be in a movie with product placement….

  5. Duncan September 8, 2012 Reply

    should have read this

    [http://www.inc.com/magazine/20110201/how-great-entrepreneurs-think.html](http://www.inc.com/magazine/20110201/how-great-entrepreneurs-think.html)

    before starting to commit $750,000.00 to a hazy outcome

  6. Richard Stubbings September 9, 2012 Reply

    My point is, what market research has been done? How big is the actual market? Are there really enough customers prepared to pay $150 for a non designer label bag that happens to have a light inside.

    In my limited experience most decisions to purchase a bag have little to do with the interior and all to do with appearance. Practical considerations rarely matter.

  7. Tao Wong September 11, 2012 Reply

    $150 for a handbag isn’t bad; it’s in the low-mid price range from what I understand. They’ve also got enough of a differentiation that it could sell.

    Completely agree on PR & Wholesale.

    For print; you need to commit to at least 6 months I’d say to a year; especially when you are brand building. I’d have taken their budget for print and committed to smaller ads for a longer period.

    Also; SEO is great if you get the right people or do it right – but if your SEO firm isn’t integrating with PR for the bags, they aren’t doing it right. It should be an integrated campaign.

    Their website should also take advantage of all the PR they are doing / have done. I don’t really see it through a quick run-through. Nor are the product photos doing their items justice – if it lights up, then do at least one shot in the dark!

    I’d also consider doing product videos for something like this.

  8. Elizabeth Ball September 12, 2012 Reply

    Thanks Tao, I think video would be a brilliant way to showcase these.

  9. Peter Tran September 19, 2012 Reply

    Can someone please tell me that I"m not looking at their newest/current website
    http://awesomescreenshot.com/0a7gmi89b

    I think they need to do something with their brand image.., or I should say, they need a face lift for their current website.

    Don’t have a very good example but I can just take these eBay listings ( from the same client that I’m working with) and we can clearly see the idea here
    http://www.ebay.com.au/itm/251135618501
    http://www.ebay.com.au/itm/251134911850

  10. Elizabeth Ball September 21, 2012 Reply

    Peter, you’re right! They are. But I think they should be using this subcategory page photo as their hero image as it provides the benefit so clearly:

    http://www.glasshandbag.com/hand_made_leather_purse_and_handbags_s/46.htm

    However I can’t see what you’re referring to with your client’s ebay store links?

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