Smurfette that really is a great bag! You should still continue to make and sell them even though someone else is doing it too - look at how many felt flowers, vintage, fabric purses, duct tape wallets ets... there are out there. It seems that a lot of sites have the identical "one-of-a-kind" handmade items for sale. If there are only a few of you making those purses the odds are still in your favor!
Being copied is really a compliment, at least that's the way I take it now. Cheers!