Heads-Up! The Costly Road of Starting Leather Goods Business

There is no doubt that leather is a symbol of durable goods. It is a lasting item which everyone would love to have for it is also a sign of luxury. This is why many people would start a leather goods business out of hobby or interest. Doing business with leather is not just about making money alone because it is also one of the best hobbies and an art that anyone would love to learn. However, the leather goods business is not just about leather crafting or reselling leather items but an investment in time and, of course, your money. 

How much is the cost of starting a leather business? It is a costly business to start because it has a maximum startup cost of $31,544 including overhead cost. The estimated operating expenses for the early stages of your business, and of course, the leather tools and materials are also included.

Crafting and selling leather goods is always a good business because it is a profitable one. You can always make money with a leather business like crafting any leather items or reselling pre-crafted leather goods. If you are a person who would take your leather crafting creativity to another level, like opening your own leather goods business, this article is for you. I will share the cost of starting a leather goods business with you whether you are planning a sole proprietorship, corporation, cooperative, partnership type of business. This will help you ease your hesitations in starting your business. 

Prerequisites Before Costing and Starting Leather Business

Of course, in starting a leather business or any entrepreneurship, there are many things to consider. Here are some that indeed are crucial for a start.

Things You Need To Consider For A Start

Create a clear plan for your leather goods business first because having a clear plan for your leather goods business is the key to success. Mapping out helps you plan all the things needed before opening your business, including pricing your leather goods and services.

To be successful in today’s corporate world, you must be adaptable and have excellent planning and organizational skills. Many people start a business with the expectation of immediately producing money, only to discover that making money is far more complicated than what you think.

Next is to consider your target market. The target market refers to your customers and attracts them to purchase your leather items. Of course, the quality is already given because you are marketing durable items but what customers will consider is the prices- too expensive or not. This is why it is essential to consider who are your target customers and why they should buy your leather goods or items.

Also, one important thing is the name of your leather goods business. Naming your leather goods business is another essential thing to consider when starting this industry because it is the first element that the customers encounter and rely on. Through that name, people will know the quality of your goods. Naming your leather goods business involves registration. So ensure to check these; state business records, federal & state trademark records, social media platforms, and the web domain availability.

If wanting to start a business with partners, you should keep in mind that having business partners with the same values as you is crucial. Choose a partner with complementary skills, define each others’ roles and responsibilities, and be honest. Most importantly, please select the right business strategy and put it into writing for legality. 

Having a business partner may be a massive help in your business, career, and everyday life. Just make sure to approach any relationship with caution and attention, do your homework, and understand the entire scope of what you’re getting into. Otherwise, you may come to regret your decision later.

Cost of Essential and Accessory Leather Working Tools

If you are a person who finds any alternative tools at home while crafting leather goods as a hobby and decided to open an online handmade leather goods business, this is a heads-up for you when you are planning to get leather tools. 

Essential Leather Tools

Tools are fundamentals in leather crafting, especially if you are doing a handmade leather item business. It is already assumed that you are already equipped with all the essential leather tools. More likely, you will not start a leather goods business if you have not practiced and honed your leathercrafting skills beforehand.

  • You need to get leatherworking awls, leather burnisher made of various materials, and leather conditioners. 
  • Leather cleaning and oil are also needed to pre-process the leather.
  • Leather creaser or folder tools and embosser machine will also be an excellent addition.
  • Leather knives and bladed tools, which include ones for fine leatherwork
  • Leatherworking dyes, paints, and finishes for durability and aesthetic purposes
  • Leather edger and beveler tools for polishing leather edges. 
  • Leather finishing tools
  • Leather glues and adhesives
  • Leather gouge tools 
  • Leather groover tools
  • Leather hardware fastener and setter tools
  • Leather holding tools like smooth jaw pliers, edge clamp, cantle pliers
  • Leather marking tools such as overstitch wheels, pricking wheel, wing divider
  • Leather mauls, mallets, and hammers
  • Leather measuring tools 
  • Leather pricking irons like chisels, punch tool, and rotating punchers
  • Leather sewing tools including needle, two-prong lacing needle, sewing machine, and stitching pony
  • Leather skiving tools
  • Leather tools maintenance
  • Leatherworking surfaces
  • Leather stamping tools

Average Price of Leather Tool Sets

For a start, it is ideal to buy a set of tools to save money. You can already have ten pieces of leather scratch awl for $9.99. You can also buy a set of tools which contain 67 pcs leatherworking kit, stitching groover, stamping tools, cutting prong punch hand, sewing kit for $33.10. 

You can find plenty of leatherworking tool sets perfect for starting your leather goods business. A 183 piece leather kit including a leathercraft working tool kit with saddle-making tools set. It can also have a leather rivets kit, prong punch, leather hammer, and other needed tools, costing $59.99 only.

Just keep browsing in an online shopping store for reliable leather tools set sellers or visit any store at your place to look for leatherworking tools made with quality and a friendly price. 

However, if you still have a leatherworking tool in excellent condition, you may still use it. This is also good since you already have a good feel for your devices.

Overhead Cost Part 1: Equipment and Facilities For Starting Up

Since you are going to start a leather goods business, determine the overhead expenses first. Overhead cost is the ongoing expenses when you are starting to run a business which excludes the direct cost in producing your leather goods.

Learning the Overhead Cost: What You Must Know

Overhead costs are the necessary expenses to start your leather goods business, also termed “one-time-start-up-costs.” This is important in trade, for it plays a significant role in setting prices for your leather goods and the profit you are going to make.

You need to monitor the overhead expenses because these are not directly proportional to the revenue. The key to starting your leather business is to lower the overhead costs, so identify them as well as the price. If you have a higher overhead cost, this will affect your net income along with profits. This will make sure you have a smooth business start-up. 

Specific Equipment Under Overhead Cost

In your startup costs, you need essential office equipment such as a computer, printer, and other office supplies are one of the overhead costs. This office equipment is required, especially if you are doing an e-commerce business for your leather goods. This will help you create a website to post and promote your leather goods, whether it is a pre-crafted item from the wholesaler or your handcrafted leather item. 

If you are already equipped with this equipment, you don’t need to buy new ones to have low overhead expenses. Consider also the photoshoot equipment so that you can shoot and post photos of your leather goods in high quality. This is to attract customers of your items because there are higher possibilities that people would not buy if they will not see any suitable representation of your leather goods. Quality photos require good quality cameras together with studio lighting. Still, suppose you only have an iPhone or an android phone with a higher megapixel. In that case, you can use it along with natural lighting or white background.

The overhead cost needed to start your business also includes the stamp and maker’s mark, a one-time investment. This refers to your leather goods brand & logo. Your maker’s signature is typically created using heated branding iron or embossing or stamping the image of your logo on the leather goods. There are various ways to develop your marks, including the use of a soldering iron route that costs $25 to 800 depending upon the quality of the stamping machines. Creating a logo stamp is not expensive, for this cost at about $40.

Another one-time investment for overhead expenses to start a leather goods business is your business cards. Yet, don’t worry. This is a meager investment that will cost about $20-50 for the first basic business card run. Business cards are essential, especially if you are still starting your leather goods business so that people will know about the leather goods you have. It is your way of advertising customers and making your leather items accessible by contacting you with the business cards.

Initial raw materials refer to the pieces of leather required to craft different goods and items. The initial leather material is still part of the overhead costs because you are still starting a leather goods business. It is expected that you will include this budget in your startup costs. But, keep in mind that raw materials are not a one-time investment because you will be getting them regularly with your profit once you have made sales. This is why you must include leather material in your startup cost to be equipped with materials essential to start running your business. 

To calculate the budget for your initial raw materials, decide first the leather goods you are going to market so that you will know the types of leather you will buy along with its costs. Then crunch the numbers. Because you are in the process of opening a leather goods business, you do not have sales yet, which means you still do not have any idea of the best-selling leather goods. This is why it is called “initial raw materials” because you will get them in a low quantity.

The raw material prices vary upon the types of leather. If you are getting a leather rawhide for 500 square feet which is likely the minimum order, this will cost $5.50 to 6.50 per square foot. There are many available leather raw materials at an online shopping store suitable for different leather goods. You can also invest in wholesaling leather materials by visiting legit platforms and look for a different leather shop there. 

Tip: you may create a sample run of your leather goods then capture quality photos for your site. If you notice the repetition of orders from different customers, start building up an inventory for that specific leather goods item. 

Overhead Cost Part II: Social Media Platforms & Others For Marketing

Overhead cost is a one-time investment as you start your leather goods investment, consider looking at the following social media platforms, which will advertise and promote your business as well as making purchases through these forums. 

Cost For Digital Marketing

The Internet plays a significant role in the world of business. This is why you should make a one-time investment in creating a website domain. This will only cost about $10 to 30, depending upon the URL chosen for your business website. Just remember to make a renewal annually on your website. 

The website hosting fee still belongs to the overhead cost, referring to the prices you are charged to host a website. This is a monthly fee like $25 per month in using Shopify or makes use of Squarespace at about $30 or any social media platform for your business website. You can choose to have a hosting fee or to place your store and leather goods. You only need to pay in hosting platforms for $0.20 per item on the list.

To help your email marketing, you may need another platform called an Email service provider to collect new email addresses from different people who want to be on your list. This will help you manage subscribers to ensure that you have sent emails to everyone found on your list. This overhead cost around $30 monthly.

Also, Google apps is a software application to help you create a professional email with the website URL compared to the personal. For instance, information@business.com than information @ gmail.com. This platform also enables you to access google docs and google spreadsheets which can be shareable with anyone. Don’t worry; google apps only cost $5 per month.

Other platforms include the ad budget to appear on Facebook, Instagram, Pinterest, or print ads, but these are all optional. These platforms can help boost sales of your business. A Facebook advertisement costs about $0.50 to 2.00 per click. At the same time, Instagram advertising costs are around $0.50 to 1.00. To boost engagement ads on Pinterest, this will cost about $0.10 to 1.50, and around a $300 budget, you can already apply for printing advertisements.

Other Essential Overhead Expenses: Legalities, Certificates, and Insurance

In starting to open a leather goods business, you will go through different legalities, which will add up to your overhead expenses.

Legalities and Certificates

Ensure you have acquired all the necessary permits needed because it will cause you hefty fines and even lead to your business being shut down. The requirements would depend on your state or local license permits in your city or town. Check with your town, city’s clerk’s office and ask for the requirements needed to get your permits and licenses. 

Some of these will include business operating licenses, planning and zoning permits, and tax regulations. The minimum cost of a business license is $500, excluding the additional fees in filing in your states. Consider also taxes and renewal each year.

A leather business would also require you to get a certificate of occupancy because a leather business usually runs out of a safe front. A CO is the one that confirms that you met all zoning laws, business codes, and regulations of the government. If you are renting a building, make sure that it has a certificate of occupancy not to hurt your financing in the long run. 

Security With Business Insurance

The minimum startup cost for small business insurance is $500. Yes, it is expensive because it aims to protect your physical stores of leather goods business from loss of income, theft, vandalism, property damage, lawsuits. 

Suppose you are planning an online business for your leather goods; then, business insurance is primarily helpful. It is mainly protection when someone hacks your online business’ payment system. The hacker can get copies of the customer’s credit card, a lawsuit from a photographer, a case for breach of contract, etc. However, it will always be up to you if you are going to apply for business insurance.

A lawyer is not necessary when you start a business. Still, if you want one, it is beneficial to ensure that your small company operates according to local laws, state laws, etc. The maximum startup cost for lawyer fees is $1,500.

For legalities, issuing a business permit, especially if you have a small establishment for your leather goods business, will have a minimum startup cost of $50. Because your business is leather goods which means more handcrafting procedures and storage space (especially if you are reselling pre-crafted leather items), you will need an office or a working area. 

If you have ample room in your home, it will do, and look for a bigger space as soon as your business grows. However, if you don’t have an extra room at your home, consider renting. Renting a space for your business will have a maximum startup cost of $2,000 and ensure to choose a perfect location convenient to your target customers. 

It’s Not Just The Funds: A Summary of Important Costs

Money plays the most significant role in starting your leather goods business. It is also the main reason why prominent companies fail each year. This is why you need to have sufficient funds before you invest in a business not to fail. Your investment funds in the leather business are the overhead costs or startup costs and the estimated costs to start and operate within three months.  

A Quick Calculation 

As mentioned, there are a lot of costs needed in starting and staying in business. The estimated minimum startup costs for a leather goods business is $1,542. The estimated maximum startup costs to start a leather goods business is $31,544 while the average startup cost is $16,693.

Again, the startup costs are almost a one-time investment in the leather business. You will need money for the overhead expenses, which cover all office equipment, social media platform advertising, business formation fees, etc. You will also calculate the money needed to stay in business, especially if you are a beginner in the leather business.

To calculate the money required to stay in business, you must determine the immediate costs and future costs. Estimate the monthly expenses such as rent, advertising, facilities, delivery, transportation, supplies (leather raw material), transportation, insurance, taxes, miscellaneous, office supplies, employees’ wages if you have, and your living expenses. 

Planning Ahead to Stay in Business

It takes a lot of effort to start a business, but once you open your doors, the actual labor of staying in business begins. To be successful, you may need to put in more time than you would if you worked for someone else, which may mean spending less time with family and friends.

List the monthly estimated expenses of your business, sum it up, and multiply the total estimated costs by three to determine the operating costs within three months. The result is the cost of the money you need to stay in your leather goods business.

If you have that amount of money, you may deposit it in your savings account before starting your leather business. Remember only to spend the money for the listed operating expenses.

The budget estimated for operating expenses is significant in the crucial early stages of your business.

Once you have calculated the estimated costs for three months in starting your leather goods business, add the total startup costs. Note, lower your startup cost as possible. The resulting summation of the three months estimated cost and the overhead or startup expenses are the costs of starting a three-month leather goods business.

You can subtract the listed costs to your available funds to check if it is sufficient. If it is not, supplement your capital so that your business can operate and stay in its crucial stages.

Learning From Others: Personal Costs

As the adage goes, experience is the best teacher. It will also help if you learn from other lapses, especially in the business industry. It is true that competition is tight in business but learning from your competitors might be a good advantage. You will save yourself from making the same mistake at the same time and work your way to success. 

Also, the best results come from competition. You can’t be frightened to study and learn from your competition if you want to be successful. It would help if you also were willing to make personal sacrifices because they are part of birth pains in starting your business.

While learning from others, make sure to stay focused and understand the risks and rewards of a business. Start by achieving your short-term goals and then look forward to the long-term rewards. Lastly, bring out all your creativity to improve and make your business stand out among the others.


Businesses make great sales that can contribute to a quality life, especially if you have set a clear business plan. However, business is not a piece of cake, for it is an investment of your financial cost or savings. This applies to starting a leather goods business and would cost much of your savings, physical & emotional stress. Starting a leather business has always been risky, but many people have become successful in this industry. In opening a leather goods business, this is the heads-up for the costly road ahead both financially and emotionally. Do not be afraid to turn your leather crafting hobby into a business and become successful.

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