Woman started a bag business from her living room. It now brings in $9 million a year

The woman's handbag business is now booming after a few roadblocks. (Image credit: frejanyc.com)

In 2019, Jenny Lei stared at hundreds of unsold handbags stacked in her New Jersey apartment, a daunting reminder of her failed attempt to create the “perfect” work bag. At the time, Lei was an unemployed UX designer with no formal fashion experience, and she had sunk $30,000 into a prototype that hardly sold.

Today, at 28 years old, Lei is the CEO and founder of ‘Freja’, a New York-based luxury handbag company that has turned a once-dismal venture into a thriving business generating $9 million in annual revenue.

"I couldn’t afford to not make it work. A lot of my savings were sitting in boxes in my living room," says Lei, recalling the early days of her entrepreneurial journey.

The road to success for Lei wasn’t easy. In the hyper-competitive fashion world, where established brands dominate, ‘Freja’ struggled for the first two years.

Lei’s foray into handbag design began not out of a desire to start a business but from a personal frustration. As a graduate student at Cornell University, Lei couldn’t find a suitable bag for her job interview in New York. She felt unorganised and self-conscious, which sparked an idea: to design the perfect work bag. The bag needed to have structure, enough compartments for a laptop and portfolio, and a strap that could fit over a winter coat.

"I thought, ‘Does the world even need another handbag brand?’ Not really, if I’m going to do things the way that everyone else has," Lei told CNBC Make It. "But I thought if I could do it in a way that felt really good to me, and would resonate with a certain group of people ... it was worth the try."

Lei used $300,000 saved from a purse dropshipping side hustle to fund the initial production. But the first prototype was a disappointment—she described it as “looking like a kindergartener’s art project.” Unfazed, she travelled to China, where she worked with factories that specialised in vegan leather.

She eventually selected a factory based on its transparency and commitment to ethical practices, aligning with her vision of ‘Freja’ as a brand that could change perceptions about "Made in China."

Despite her efforts, sales were slow. In fact, it took Lei a full year to sell the first batch of 300 bags. However, rather than abandoning her idea, she doubled down, investing further into social media marketing and a second run of inventory with a new design. The results were gradual but consistent.

It wasn’t until 2022 that ‘Freja’ began to see significant growth, bringing in $1.7 million in annual revenue. The key to this success? A combination of loyal customers drawn in by minimalistic designs and a commitment to environmental sustainability.

By 2023, ‘Freja’ had more than tripled its revenue to $5.3 million. And Lei's vision of expanding beyond eco-conscious consumers paid off, allowing her to pay off business loans and invest in new bag designs. The company is now on track to finish 2024 with $12 million in revenue.