Hello! Who are you, and what business did you start?
I am David Inman, founder of NerdKungFu.com. We are a nerdy t-shirt site specializing in officially licensed t-shirts, posters, and gifts for nerds and lovers of specific genres. Movies, TV Shows, Video Games, Comic Books, and anything else a passionate nerd might like, we carry! My team and I can talk the talk as we are all super nerds ourselves, passionate about our nerdy loves (I’m a Trek man myself), and wanting to show them to the world.
When I started the site in 2010 we had 100 t-shirts on a shelf in the back of my office. Today we have 165,000 products in sizes ranging from infant 6 months up to 7 XL (we sell a lot of plus-sized shirts) as well as hoodies, tank tops, long sleeves, and v necks. We have an excellent selection of posters and gift items as well.
Here’s a pic. I’m the guy on the right.
What's your backstory and how did you come up with the idea?
It’s kind of a weird story. I had been working as a sales representative in the licensed t-shirt world for years selling these products to most brick and mortar shops with a couple of online retailers. I was working as a sub-rep for a sales agency and came to find that the agency and its head rep were withholding commissions owed to me. I spent weeks going through old purchase orders and commission reports and was staggered to learn that the amount owed to me was close to $150,000.
I was forced to take the agency to court and the first thing they did was fire me. All of a sudden I had tons of free time and direct contacts with all the best-licensed t-shirt manufacturers in the country and nothing else. I was having lunch with a friend and discussed the idea of taking shirts to comic conventions and the like and he suggested a website. It was like a lightbulb in my brain and 20 minutes later we were on GoDaddy and found the URL NerdKungFu.com (inspired by my nerdom and my childhood love of old Wu Tang and Shaw Brothers style kung fu theater).
Fortunately, I had considerable savings and a couple of smaller rep jobs that kept me from starving but it was quite a leap of faith to jump into this, and to justify it I started working 10-12 hours on the site. When I started I knew absolutely nothing about site building, SEO, PPC, or e-commerce. I had considerable experience in traditional retail store management but had to learn everything from scratch. Painful (the term “learning things the hard way” can be readily applied to this period) but everything I learned I learned.
As a rule, I look for products that I or someone like me but who has other interests would like to wear (in other words if I were a huge Supernatural rather than Star Trek fan what would I like). Generally, I have a good feeling for my customers. These days the vast majority of our sales are ship-based so we don’t have to commit a lot of dollars to inventory. I tend to wait to see what shirts sell well on a drop shipping basis and if they seem to justify the expense then bring them into live inventory.
Some categories like posters we carry all here and I have used my best judgment as to what will sell but after all this time I have a good idea of what the American gestalt consciousness is looking for and am rarely really wrong. I have also learned that there is a body for every t-shirt and they will all sell eventually.
Take us through the process of designing, prototyping, and manufacturing your first product.
We don’t do a lot of our products but rather products from licensed vendors. Just to get the rights to pay most licensors a royalty requires several thousand dollars upfront and if you want to sit at a table with Disney you had better have $100K just to get the discussion going.
As an entrepreneur, you have to have a big-picture goal!
That said our first selection of products was products I knew from my time selling them as a sales representative were good sellers. I have since then learned the benefit of “long tail” marketing and these days we do very well with what most bigger stores would consider outlier licenses since we don’t have to compete with the bigger stores. There is nothing wrong with selling good Star Wars shirts and we do very well with them but we also do freakishly well with licenses like the Bad News Bears or Buckaroo Banzai.
Most of our dropship shirts are printed using a direct to garment (DTG) process. This is a giant inkjet printer that works on t-shirts, albeit with true plastisol ink that looks to the layperson identical to a traditional screen print. The technology has improved dramatically over the last three years and these days only a true t-shirt expert (such as myself) would be able to tell the difference between DTG and screen.
All our shirts are licensed and royalties paid by the printers and as official retailers for those printers, we get what’s called an extended license, granting us the right to sell the products at retail. One of the common questions we get is if we can have a shirt made in a different color or with Darth Vader high-fiving Mr. Spock or something. As all the images need to be approved by the licensor for even the substrate (t-shirt) color this is nearly impossible and there is no way Disney and CBS would approve a mixed license like that even if we wanted to pay the massive upfront fees. It’s a bizarre process but if you don’t adhere to the rules you will start getting Cease and Desist letters pretty quickly (depending on how actively the licensors enforce their intellectual property. No one ever messes with Disney).
One of the weirdest processes early on was figuring out the packaging. T-shirts are pretty easy. Almost all shirt resellers use white mylar self-sealing bags. Our printers handle most of them and that is what we use for our shirts as well (although in the interest of cutting down on waste plastic we carry multiple sizes and make sure we are using the smallest package possible). However, things like posters and coffee mugs had a brutal learning curve until we figured out how best to ship them. The poster, in particular, was a real pain as we found tube mailers almost always get crushed. Eventually, we found (or rather copied another poster seller) a triangular mailer that has 20 times the rigidity. It’s odd the odd things you learn as you develop a store like this.
Describe the process of launching the business.
Before the process can begin you have to have all your ducks in a row. Make sure you have either a ready pot of capital or (as I did) a day job that keeps you fed and clothed. Fortunately, I had a great day job that paid well and didn’t require a lot of my bandwidth.
At that point, I made a list of the things I needed to do and put them into two groups. Group A was all the items I knew I was capable of either doing or learning. This was sourcing, product selection, content writing, warehousing, and shipping. Group B was all the items that were beyond my skill set. Website design, graphic arts, SEO and marketing, and product upload. For those, I had to find people. These days it’s easy and whenever we need some coding we go to UpWork or Fiverr and find a good one relatively cheap but back then it was crowdsourcing all the way. I found a site builder who worked for one of my customers and was looking for some freelance work, a graphic artist who was the daughter of my old friends, and an SEO guy who was the husband of another friend.
Ironically if I were to compile that list today, these items would be completely transposed. I know enough about site design to at least better manage someone, have become quite adept at Photoshop, and consider myself an expert at SEO and online marketing. Writing, warehouse and shipping, and even a lot of sourcing and product selection is not a good use of my time and I have people to do that for us. As a rule, however, I make sure I am capable or at least knowledgeable about any part of my business.
I paid for most of the development out of my savings but in truth, the cost of goods far outstripped the site development and without a storefront or warehouse (I started with two shelves in the back of my office at home) the expenses were not outrageous. There is a thing called product density that makes some products much easier to manage than others (dollars per square foot) and t-shirts do OK.
I knew at the time that nerdy t-shirts would sell and as a nerd, I found sites that lacked that authenticity frustrating. I planned to “keep it real” in the nerd world and cater to the fans out there.
The most important thing I learned from this process is to stay out of the middle. As an entrepreneur, you have to have a big picture goal (build a kick-ass website that sells nerdy t-shirts to nerds worldwide), and every day you have things that need doing but if in 2009 I had known or considered how much work would be required I never would have started. Instead, I focused on the immediate task at hand. It’s like trying to eat a 10-pound rock. There is no way you can swallow it whole and will probably kill yourself trying but if you take a hammer and break it down into sand mix it into a milkshake every day eventually you will grind through it (haw!).
The other cool thing about breaking a boulder into smaller bits is pieces and particles will fly off or land on the ground and be lost, thus reducing the amount you have to eat. Maybe that site developer you hired is also a great graphic artist and willing to throw in some basic work for you with the site, or the content writer you found on Fiverr is also an SEO expert. If you work on the small stuff while keeping the big picture in mind you will find all kinds of fortuitous synchronicities.
But never, ever look at the middle picture or you will get bogged down and have to eat a giant boulder.
Since launch, what has worked to attract and retain customers?
For the most part, we find customer retention is best served by working to build an actual relationship with each customer. Everyone says that but rarely does a lot to make it happen but we do as much as I have ever seen anyone else do. As a rule, we treat our customers the way we would want to be treated and that is as human beings, not a number. Each order gets a personalized thank you note (sure it’s a cut and paste letter but we always mention something about the order and address them by name) that also invites the customer to follow us on social media as well as join our affiliate program. We have a toll-free number that is answered by a human during business hours, and any issue brought to us is addressed rapidly and with customer satisfaction in mind.
Weekly newsletters are our rote these days. We used to do them monthly or every two weeks but seem to be getting the best response from this. It’s also nice and cheap.
However, we have found the best way to retain customers is to find customers that want to be retained. We used to spend a healthy sum of money every month on PPC (Pay Per Click) with Google AdWords but found these customers were the definition of churn. They find the shirt they want at the best price, come in, buy that one shirt, then bounce. Next time they need a shirt they just Google it again so you can pay the PPC fee to sell another single shirt. This system works great if you are selling expensive items with a high margin (or at least a high dollar margin) but in terms of customer retention, it is the worst.
We have found that customers who find us through organic search, one of our posted blogs, or one of our affiliates are the best for retention. Customers who come in that way tend to spend more time on-site and order more shirts, then return two months later for an even bigger order. Our AOV (Average Order Value) has been climbing every year since we dropped PPC.
Of course, this all depends on your product and customer type. A trendier product would probably do well on Social Media whereas a bigger ticket item like a car or computer would do well with PPC. You have to try everything and see what works.
We did do Amazon for a while but opted out after we learned what a pain working with Amazon and their customers can be. Amazon has very stringent rules for 3P dealers and over time our business has shifted to more drop ship than held inventory so we were constantly getting popped for late shipments that were entirely out of our control. Meanwhile, while there are many great customers on Amazon the demands that the bad ones have gone beyond the pale. It seems ironic to me that people on a site known for the lowest prices seem to think their packages should be airlifted to them via a golden helicopter but there it is.
Of course, while that is going on there are about 100 foreign Amazon dealers who will immediately start copying whatever your best product is and selling it cheaper so have fun getting on Brand Registry and trying to shut them down. Eventually, Amazon will make their versions of your best-selling products, label them Amazon's Choice, and not even hold the door for you as you leave with your business in shreds.
If you want to hitch your wagon to the Amazon horse that is your call to make but you have to be very careful or that horse will one day turn around, beat you up, and steal your lunch money.
One last thing to consider when making the call to jump on board with Amazon is if you are a new company and need to find vendors to supply you they are NOT at all eager to sign up yet another Amazon dealer. When I start talking to a prospective new vendor they act like I am trying to schedule an appointment to come over and punch them in the face but when I tell them we are a stand-alone site and not on Amazon that punches turns into a rainbow of puppies and kittens. It’s harder to get opened up these days than you think and the stink of Amazon will hurt.
How are you doing today and what does the future look like?
We are actually on a downbeat right now due to some issues related to Google and our SEO. However, we are in the process of a technical fix and have launched an extensive SEO and content writing campaign. Sales are still solid enough to keep us moving forward and we forecast a very solid to the great Holiday season. We are down about 8% in orders but almost dead even with our dollar volume YTD and anticipate growth by the end of the year.
Profitability is decent. As we sell licensed shirts we don’t have the massive margins most t-shirt manufacturers enjoy but we are in the 12-15% net at the end of the month.
Except for some conventions such as San Diego Comic Con (see us there in 2022!) our sales are exclusively through our stand-alone website. We did an entire site rebuild at the beginning of 2020 and are looking at another at the beginning of 2022 with an emphasis on our mobile template.
These days we maintain a very small warehouse in Oakland CA with three employees (myself and two customer service/warehouse shippers). This only accounts for about 7% of our volume. The rest is done through our dropshipping partners so the majority of our employees are order processing and customer service folks with a few content writers thrown in. We have employees in Ohio, Maryland, Germany, and the Philippines. We also outsource several SEO and other marketing duties to SAAS and service partners.
We are adding new products every week but are currently working on creating some sibling sites to cover some of the more niche areas we don’t do well with currently. We are also investing in our printing capabilities and are looking at the possibility of signing our licenses and selling licensed shirts wholesale.
Through starting the business, have you learned anything particularly helpful or advantageous?
Well, those two rules I already mentioned are pretty important. Never look at the middle picture and learn every job. I still spend a couple of hours a week in the warehouse picking and packing orders just to keep my finger on the pulse.
Probably the biggest thing I have learned and the biggest mistake I made in the past is when you go to work leave your ego at home. There is nothing you can say about my business that relates to me as a person and that gives me the clarity to see all the issues my business faces for what they are. If you co-mingle your ego with your business you will find yourself fixating on that one negative review or the vendor that keeps screwing up your orders and tunnel vision yourself into the side of a cliff. As important as my business is to me at the end of the day I remind myself that they are just t-shirts.
The other thing to keep in mind when selecting what to do for your business is don't choose something you love. It’s OK to love your business and you can fall in love with your products but if you are an expert in chocolate and love it to the point where just the smell of chocolate gives you joy and you start a chocolate business the day will come when you just aren’t in the mood for chocolate but have to deal with it anyway and that is the day your love dies and becomes a job. I’ve always enjoyed t-shirts and wearing them but they are not my personal life. The things I love I save for me.
What platform/tools do you use for your business?
We use a lot of tools.
- Our store is built on Big Commerce (actually two of our new stores are built on Shopify and
- In the past, we have used Volusion. FYI they all suck in different ways).
- We used to use a company called Sales and Orders Ads for our PPC management.
- We use a SAAS called Signifyd that does a fraud verification check on our credit card orders.
- Authorize.net, PayPal, and Amazon Pay for transactions.
- We handle our affiliates through Refersion.
- And our reviews through Reviews.io.
- MailChimp for our email blasts.
- We have a new on-site search tool called Velou that is very cool and exciting.
- Dropship.com helps with about 30% of our dropshipping.
- Zonos is a service we use for overseas orders (they handle VAT and Tariffs).
- We do a lot of SEO work on MOZ although I am considering jumping over to SEMRush.
- Most of our outside work we get on Fiverr or UpWork.
- And all of our writers regardless of how well they claim to know English use Grammarly.
What have been the most influential books, podcasts, or other resources?
I listen to too many different podcasts and YouTube videos to list here. There are two books that I consider critical to my process. One is super pretentious: Sun Tzu the Art of War. I like the Thomas Cleary translation. I know but honestly, if you read and think about each passage you will be shocked at the insights you can glean.
The other one is weird and no one has ever heard of it: Cheaper by the Dozen by Frank Bunker Gilbreth Jr. and Ernestine Gilbreth Carey. Everyone immediately thinks of the really bad family comedy with Steve Martin but in truth, it is less about the fact that Frank Gilbreth Sr. had 12 kids and more about him personally. You see he is known as the father of modern efficiency and the way his kids break down his process for making things faster and easier is brilliant. I think about that book every time I start a new process or even use an existing process. Well worth your time.
Advice for other entrepreneurs who want to get started or are just starting out?
Hang tough. Everyone I meet is always impressed about running my own business and always says “Oh, I wish I could do something like that”. The fact is the only thing preventing them is their fear. If being an entrepreneur was easy everyone would do it but it takes a certain personality to be able to do it. If you like having a regular paycheck and not taking risks with your livelihood this is not for you.
That said, make sure you have food and a roof over your head. Entrepreneurship is not a thing that happens in a few weeks. Be ready for the long road. It can easily be months if not years before you hit that magic break-even point and for a lot of new businesses, it never happens. Of course, if you are the right personality for entrepreneurship and your first business fails just try again.
Finally, always be ready to pivot. The shirts I thought I would be selling when I first started are nothing like what we sell every day today. Let customer demand dictate your direction, not some idea locked into your head based on an article you read in Fast Company or the Wall Street Journal. A new company grows organically and if you prune off a branch that might overtake the rest of your plant you could stunt the growth.
Are you looking to hire for certain positions right now?
We are considering a social media position. The one area we have always failed in is social media and that is probably due to my lack of interest and disdain for it. This would be an outside contract gig but if the results are good it could lead to more.
Where can we go to learn more?
If you have any questions or comments, drop a comment below!
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