How Mon Purse makes $2 million worth of customizable handbags a month

The company, which launched online, is now carving out a global brick-and-mortar presence. Mon Purse has one standalone store in Sydney, and in-store shops at Selfridges in the U.K., Bloomingdales in the U.S. and Myer, a department store in Australia. Customers, both online and in store, can shop a selection of handbags designed by the Mon Purse team, add a monogram to it or create their own from scratch. The brand is reportedly on track to bring in more than $20 million in revenue in 2017, after hitting $2 million in sales in December.

Hopkins, who was a marketing and sales director at an Australian startup when she launched Mon Purse, had no manufacturing background. While trying to convince factory and supply chain partners to work with her, she spent time doing customer research to make a better case for her business — while, at the same time, finding her co-founder, Andrew Shub, who came from a fashion manufacturing background.

“The growth we’ve seen is largely thanks to understanding our customer early on,” said Hopkins. “Customization has to be built on customer behavior. What do they want done for them? What do they want to do themselves? What level of detail do they need to see? As recently as 2015, we were doing only $10,000 a month [in sales]. We couldn’t have gotten here without listening to and understanding our customer.”

Mon Purse also couldn’t have scaled a customizable business without a proper supply chain in place. For a new company to offer on-demand, customizable designs shipped within a reasonable timeframe (customers are asked to expect their bags to take up to four weeks to ship), establishing a reliable supply chain and manufacturing process was crucial.

To make that production window while ensuring quality, Mon Purse’s eight-person development team adopted the Japanese Kanban method, a scheduling system for supply chains that involves manufacturing goods in a particular order in order to maximize efficiency and keeping inventory controlled by only producing what’s in demand. At its factories, located in Turkey and Italy, different styles of handbags are produced only on certain days of the week: Clutches are made on Mondays, while totes go into production on Tuesdays, with flexibility based on how many orders are placed.

A tri-colour take on our Mini Bucket Bag 🌈 #designyourown #oneofakind

A post shared by Mon Purse (@mon_purse) on Mar 29, 2017 at 2:11pm PDT

“We want to avoid the pitfalls of traditional retailers, which means we don’t guess or overproduce,” said Hopkins. “There’s nothing worse than making too much and then always being on sale.”

For its proprietary platform for designing custom bags, Mon Purse uses physically based rendering technology in its 3D models, a tool typically used in gaming to make characters and color details look more realistic. However, Hopkins felt that it would be hard to build enough trust for customers to design or order the bags (which run between $280 and $480) by establishing an online-only presence. So it sought out the partners that other handbag brands, like Coach and Michael Kors, are beginning to turn their backs on: department stores.

“Five years ago, we couldn’t have gotten a foot in the door at Bloomingdale’s,” said Hopkins. “That says a lot about where that market is today. But to scale, we needed to have that relationship with an established retailer.”

The custom bag creator on Mon Purse’s website

Mon Purse has established “shops-within-shops” at its department store partners, meaning they’re not wholesale partnerships. The brand still owns its inventory, but it gives a commission on each sale made to the hosting store. It’s a similar model that Rent the Runway adopted when it inked a deal with Neiman Marcus.

“Department stores, which have been so slow, need to be more experimental and innovative,” said Malinda Sanna, founder of the agency Spark. “It’s no longer just about having the buzziest brands around or just piling on more, more, more. Well-curated experiences perform the best, not increased inventory.”

Longstanding brands have also recognized customers’ desire to customize their products. Coach installed a customization workshop in its newly opened New York flagship store. Last year, Gucci launched a customization service for its leather, denim and silk jackets.

The problem, particularly for startups, is that long lead times can scare off customers. When shoppers on Mon Purse’s website add a custom bag to their online shopping cart, they are met with a pop-up notification that flags the four-week delivery time. Fellow startup brands specializing in custom styles, including Shoes of Prey and Indochino — which ship out styles (custom shoes and suits, respectively) in four weeks, as well — are also dealing with ways they can cut down on production and delivery time.

“We’re vertically integrated, and if you buy a pre-made bag, it ships in two days,” said Hopkins, acknowledging the long wait. “But people who create their own don’t have to compromise on anything, and we think that’s a strong message.”