The current challenge of incorporating a photograph into your purse design is a perfect opportunity to consider collage.
I always am inspired by the creations of Bari J
Look at these amazing bags that were published in a recent issue of Belle Armoire
Equally inspiring is Calamity Kim.
Her tutorial on making a gnome house purse could easily incorporate photo transfers
And how cute is this journal page by Gooma8x that honors her dog, Cinda Lou Who?!
(click on images to go the her Flickr page)
The photo is transferred to fabric, and also incorporates collage with applique and machine stitiching.
Something like this would look great made into a bag.
She also made this "Tell me a Story", a photo of her pregnant daughter
"Loose Ends", that captures trimmings under a layer of netting
Originally uploaded by gooma8x
and "Let's Celebrate", a photo transfer of herself and birds