Kudos to you to try a new project. Many of the tote bags I embroider are a heavier fabric and I no longer hoop stabilizer for those bags. I do hoop the bag and have had good results. I use the same embroidery thread and needles that I use for other projects. It is harder to embroider ready made bags on a single needle machine. If you have a multi-needle machine it will be much easier to hoop. I do heavily press and starch the bag before embroidering. I know others will have lots more ideas for you. I do hope you stitch up some bags.

I have embroidered on a few tote bags - some made from scratch, others were pre-made (purchased). For those purchased with linings - I took out an internal seam to get to the outer shell for embroidering. That is a lot more work, but gives more professional results which I believe are worth the effort. Like Karen, I did not use stabilizer since the outer fabric is usually a heavier weight (canvas, drill or duck cloth, etc.). But if yours are a lighter cotton fabric, then use a medium weight cut-away.

One bag got a business logo that I digitized for the owner, but most of the other bags I decorated got large monograms, or floral design combinations.

Can't wait to see what you do with yours.

I've done a bunch. There's more freedom with the design and placement when you sew the totes yourself - I have a bunch of pics of ones I did for a Master Gardener fundraiser on my blog and a few pics of purchased boat totes i'd also embroidered. I have a home machine single needle. I'd also considered - but not done although I bought the file - using a large appliqué oval from Sonia Showalter - her site shows you how she embroiders on it then applies it to a handbag.

Here's a link to a tote I did recently. There's a picture of how it goes on the machine. I turned it inside out and put most of it over the top of the machine. The tote needs to be large enough if you want to do it that way. Some people build risers to put under their machine so the bag can hang down but the bag still needs to large enough to fit over the embroidery arm if you want to do that.
I hooped cut away and used wss on top. I pinned a lot!

On my Janome 350, I can stitch a 4x4 design near the top edge of the ready-made book bags at Michael's stores. That's about a 12 inch wide bag, so 24 inch opening, and the smallest I could work with, other than zippy bags I embroider in the process of making! 5 x7 hoop is not possible till you get to a much larger size and then the weight of the bag might distort my hooping and stitching. Good luck!