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10 Tips For Startups Sourcing Products From China

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I had the pleasure recently of interviewing Michael Fox, who is the co-founder of the online store Shoes of Prey. What I loved about talking with him is that most of their brand has been built by word of mouth and the use of social media influencers. One of those social media influencers was Juicystar07 aka Blair Fowler, who sent more than 700,000 people to the Shoes Of Prey website in a very short period through a Youtube video she shot.

In the first three years, none of the founders took a salary, and the money they had each saved was what they lived off. In June 2012, they raised a $3 million AUD round of funding which they used to ramp up their hiring and experiment with marketing channels. In November 2013, they raised another $2 million in funding. Finally, in November last year they did a big round of $7 million to help them grow even further.

Shoes of Prey are predominantly an online business with a small retail footprint that allows women to design their own shoes, which they make and then send to their customers. The options for designing women’s shoes on their site are literally in the trillions and you can change things like the toe shape, the back shape, heel type, decorations, leather type and colors of the shoe.

The biggest success they have had in recent times is their partnership with Nordstrom in the USA, who have 120 department stores. They currently have two retail stores in Australia and six retail stores that they have partnered with Nordstrom over in the USA. After being introduced to Nordstrom they took feedback on their design and spent the next 12 months tweaking things for the USA market. This resulted in them getting a yes from Nordstrom. The main crossover was that they are both fanatical with customer service so this was a good foundation to build a partnership and relationship on.

Michael, his ex-wife Jodie and Mike Knapp started the business while they were all studying at law school. The three of them were fairly entrepreneurial and started out with regular jobs. Michael was doing advertising sales at Google; Mike was a software engineer at Google and Jodie was working in advertising. When Michael and Jodie would book holidays, Jodie would always like to book stopovers in Asia because there were stores where you could design your own shoes.

On her second and third trips, her friends started asking her if she could design shoes for them because they had seen the cool shoes she was wearing. The three of them wanted to start something in the online space for a while and spent many years diligently saving up their money to do so. When Jodie’s light bulb moment came with the shoe design concept, the idea ended up becoming the now famous Shoes of Prey.

The future looks bright for Shoes Of Prey so expect them to be opening more stores, raising more money from investors and introducing new product lines such as boots, handbags and other leather accessories.

Below are the ten tips Michael Fox gave me to help you be successful in sourcing products from China for your startup.

1. Find smaller suppliers at the start

When you are first looking for suppliers, you want to try and go with someone who is a bit smaller because they will be hungrier for your business and might be more open to doing something a bit different. Michael said that the economy also helped them because during 2008 the Global Financial Crisis hit the smaller suppliers, and their orders were suffering as a result.

Shoes of Prey had to find fairly unique suppliers in China because they were sourcing custom made shoes one at a time and sending them to a customer rather than ordering containers of product. Rather than using websites like Alibaba, which is great for generic products, they attended trade fairs in China and met with shoe manufacturers. The first obstacle they had was that the minimum order was often a thousand pairs of shoes, and they wanted them made one by one.

2. Stand out with your product to avoid copycats

To avoid copycats copying your product and affecting your sales, you should consider the concept that comes from Seth Godin’s book “Purple Cow.” The analogy in the book is imagine you’re driving past a paddock of brown, black & white cows, you wouldn’t pay any attention because you have seen this before but, imagine you saw a purple cow, you would be posting photos on Facebook and telling everybody. What your business can learn from this analogy is that you want your product to be like the purple cow and to really stand out from the other products in the market so that you will attract buyers that can’t go anywhere else for what you offer and avoid copycats. It’s this concept from “Purple Cow” that inspired Shoes of Prey to start their eCommerce company.

If there is a way for you to develop a unique product, you won’t have to deal with the issue of your suppliers selling the same products to your competitors. You can try locking them into exclusivity, but you will need the volume to do this.

3. Get the volumes up with your marketing

From the beginning of the Shoes Of Prey business, they marketed via word of mouth and on the first day they sent an email to about eight hundred of their friends. The email told their friend’s what they had been working on for the last few months along with a coupon that gave them a $50 credit. This $50 credit also allowed their friends to forward the same coupon onto other people to try it out too. Michael believes that word of mouth, along with a unique product and awesome buying experience will see your online sales quickly grow. Through this process, it’s a good idea to pay close attention to your net promoter score, which will help you attract repeat customers.

The other part to Shoes Of Prey’s marketing strategy was to open small stores within larger department stores to leverage their brand. Every time Shoes Of Prey open a store in the USA they contact all the local fashion bloggers, Instagrammers and influencers and invite them along to the store events. This helps to get people talking about them, and the traditional media are also very useful for these events too.

Shoes Of Prey had an amazing story where a video blogger on Youtube spoke about their product, and they got more than 700,000 thousand visits to their website. This volume of traffic was more than what they had had in the nine months prior to the video being posted! Check out the video  from Juicystar07 below

Go through your own customer database using some of the tools available online, which allow you to lookup your customers Instagram accounts to see who the influencers are and then invite these people to your events. Consider also using a PR agency that will have access to a lot of the top fashion bloggers and journalists.

4. Work with multiple suppliers

Michael said that at the start the approached about twenty suppliers before they picked two suppliers and began placing orders with one of them. With a business like customised shoes, you can’t work with two suppliers because one factory might make a totally different shade of red shoe than another. When three months with one supplier passed, the relationship just wasn’t working out which is why it is always important to have a second supplier as a backup. The next supplier that Shoes of Prey used lasted for three years. Michael’s advice would be once your startup gets big enough, it’s a good idea to think of building your own factory in China, which is what they now have.

If you only have one supplier, then that company know that strategically you are not in a strong position and this can lead to them dictating both price, delivery times and quality.

5. Make it easy to send orders to your supplier

Before they had their own factory Shoes Of Prey developed an online order form that had a built in translation system that could translate the order from English to Chinese and then be sent to the factory to explain the individual shoe that needed to be made. Once the order form was in the factory, all the components of the shoe would be put into a box and go through various stages to make the shoe before going then proceeding through to quality control.

With custom made products it’s important to price the shoe at a lower margin when you begin so that you can still be competitive, once the volumes rise you can then increase your margin because your buy price is lower.

6. Be careful of intermediary shipping

China is like the Wild West for doing business and if you have the money to spend you can source almost anything very quickly. The negative is that if you don’t have enough shipping volume in the early days to deal with the large shipping companies like DHL, you are forced to use an intermediary. What Shoes of Prey found was that because the intermediary were paid by the cubic metres of the shipping parcels and then they in turn were charged by DHL in cubic metres, they would unpack their nicely packed shoes boxes, and cut down the top off the shoe box to make the shipping cheaper for them.

Customers began telling them that the shoes were great but the boxes looked horrible, and Michael couldn’t figure out why. Being a clever entrepreneur and understanding the power of customer feedback, he drove around to one of the customer’s houses in Sydney and inspected the box. On closer inspection, Michael could see the shoebox had been cut around the top to save space.

7. Keep a close eye on the payment terms

In the early days of your startup, you should expect to pay your Chinese suppliers up front. In the case of Shoes of Prey, they would get the money in full from the customer at the time of ordering, and once they had a relationship with the supplier, they could typically pay 14 days from the invoice. What this did was put them in a positive cash cycle and allowed them to grow. For you to be successful in importing products from China, you must be continually renegotiating your supplier payment terms to make the cash cycle as good as it can be.

8. Keep the design process simple at the start

Initially, Shoes Of Prey used the Chinese manufacturers design of the shoe to start with and so that it wouldn’t burden the relationship too much early on. If you go down this path, consider flying to China and seeing all the samples yourself. If you only deal with them by email, it can be tough to have any sort of relationship. As things have progressed, Shoes Of Prey now do all the design work and styles themselves. The continual theme here is to start with a simple arrangement with your manufacturer otherwise you will find it very difficult to get your first one. As things move forward, and they can see orders coming in, they will be much more open to trying new ideas with your product.

9. The first employee you hire should be in China

Overcoming the language barrier when dealing with Chinese suppliers is definitely possible as a lot of them have English speaking sales and business development staff. Very early on in your startups journey, it is a good idea to hire English speaking staff that work for you and are based in China if you’re going to be sourcing products from there.

The nature of manufacturing anything in China is that you must have rigorous quality control standards, and this must be done by you. For Shoes Of Prey, the first employee they hired was based in China to do quality control before they even launched. As you expand you should eventually have your own factory with a workforce of employees that you employ directly – small steps should be taken early on.

As founders, you should expect to be spending a fair bit of time China yourself keeping on top of the quality control, and perfecting the business.

10. Control the production time

If the manufacturer knows you can’t go to another supplier, it can be very challenging to hold them accountable for production times of your product. One solution to this problem is to keep the backlog of orders on your end. For example if you had 100 outstanding orders for shoes, you would send 10 to the factory, they would produce them, and then 24 hours later you would send an order for another ten of your must urgent orders and so on. This can help them keep the production time under control.

Visit the Shoes Of Prey website to find out more about their products and latest styles.

Tim is best known as a long-time contributor on Addicted2Success. Tim's content has been shared millions of times and he has written multiple viral posts all around personal development and entrepreneurship.You can connect with Tim through his website www.timdenning.net

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Startups

8 Key Factors That Discourage Investors From Putting Money Into Your Startup

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Today’s ideas are tomorrow’s winning businesses. Ideas executed brilliantly and with proper investment bring your business success. That is how the world of business got the likes of Apple, Google, McDonald’s, Amazon and so on.

But why in spite of the brilliant and promising ideas at the core of their business, many startups fail to attract investors? Why do investors hesitate to put their money into some startups? Well, investors have reasons and only by deciphering these reasons we could get hold of some deterrent factors that hold them back.

Let us explain some of the vital factors that prevent investors from putting their money in the startups below:

1. Inefficiency or Absence of Leadership Qualities

Inefficiency is the most significant deterrent factor for pulling the success of most startups. This can also be referred to as the lack of leadership qualities. Investors always want to make sure that they don’t lose their money through a company that has an extraordinary business model but no efficient and skilled business leader to make it successful. When fetching investment from investors, you need to offer a clear prospect and detailed plan of how you are going to achieve the goals.

2. Lack of Trustworthiness

An investor puts his money on a venture purely on the basis of the credibility and trustworthiness of the business. This is why besides having a sound business plan with clear objectives, you need to establish the integrity in terms of the security of the investor’s money and how the fund is going to be invested to give results as per business plan.

If an investor has a feeling that the startup may not have enough customers to fulfil its financial liabilities or if it finds that the business is hiding some information, it may further push the trust of the investors down. Total transparency and establishing the faith of the business brand are crucial for finding investors in favor.

3. Lacking Experience in Business Management

You have a great business idea backed up by a sound business plan and solid trustworthiness based on your background, but you have zero experience in managing a business. This is a serious reason for an investor to deny making any investment in your business. An investor cannot put his money just to allow you trying and learning your management skills the harder and riskier way. Uncertainty is the single biggest turn-off factor for any investor and lack of managerial experience is synonymous to that.

4. Business Model is Not Sound Enough

You have a business idea, some efficient, competent and experienced professionals as leaders, the great stamp of trust and pretty much everything that make a company look promising. But what about your business strategy and business model? Are they sound enough to take on the market competition and challenges for business growth? Well, this is what investors are most interested in.

In most cases, a business model is what makes an investor think twice and even take a backward step from investing in a startup. After all, your business model and strategy will decide how your business and products will be able to withstand competition and become victorious.

5. Taking Investors for Granted

This is a big mistake on the part of many startups. Just by becoming confident in the potential and the soundness of the business model and prospect, a business can consider getting investors on board requires just a little effort and time. But in reality, getting investors on board is the toughest thing a business can think of.

This is why without proper and meticulous preparation, it would be foolish to approach investors for your business. Most investors receive hundreds of such emails and a similar number of approaches through other means and they coldly just let them pass. This is why you need to send them very detailed proposals backed by strong recommendations and referrals.

6. Targeting the Wrong Investor

Every business has a target customer base, right? Not all customers are interested in every product in the market. Similarly, not all investors are interested in your business. Investors based on their prior experience and industry exposure, put their money in businesses that they know like their own palm of their hand.

So, targeting an investor who has no interest in your business will only drain your energy and bring you unnecessary frustration. When you are seeking investors for your software startup, don’t approach someone investing in real estate business.

7. Non-Realistic Proposal for Funds

Investors normally come with huge experience of your industry and so they have a clear idea about the fund requirements for your business startup. Moreover, they already have invested in other ventures or have gone through many proposals. Naturally, they have every bit of estimate already in their mind. So, any proposal claiming a lofty and unrealistic amount will only face rejection.

This is why it would be wise to become meticulous about your estimation of the required fund and calculation of various cost factors. Have meticulous details about every facet of investment backed up by breakup of the costs. Only when you can convince them with correct estimation, investors can take interest in discussing the matter further.

8. Make Sure Your Product Solves a Customer Problem

Will any investor put money in building a simple calendar app now? No, simply because such an app idea has no value for the end users now. Will an investor put money in a product that has already been outdated and has no use? No, no investor has to even go through such a proposal for dismissing them.

Well, to fetch investment, your product must be thoroughly customer-centric. It not only has to solve a problem but has to deliver some competitive value in comparison to similar products in the market.

Obviously, finding an investor for a new business is not an easy task, considering the huge competition that businesses need to deal with. But, if your business idea is unique and you fill all those requirements correctly as mentioned above, finding investors may not be as tough as it sounds.

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5 Must Have Branding Tools for Your Startup

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Your brand is more than just the colors on your website. And for startups, it’s important to create a strong and memorable brand from the beginning if you want to stand out from the competition, scale your company, and find your ideal customers faster.

Here are 5 simple tools that will help your company avoid branding mistakes, take charge of your visual identity, and set a solid foundation for future growth:

1. Graphic Design Software

The word “design” doesn’t have to be overwhelming. Before deciding on your startup’s logo, colors, designs, and overall tone, consider working with a brand strategist who can translate the core ingredients of your startup into a visual identity that speaks to your target market.

Brand strategists have expertise in the psychology of colors, shapes, textures, and words, and they will work with you to make sure that your branding appeals to your target audience. Once you have those basics of your brand established, there are several tools that can help your company refresh and maintain your visual identity.

The absolute best graphic design tool for non-designers is Canva. While the free version has a lot of functionality, the paid plans offer more customization such as the ability to import your exact brand fonts and colors.

But if your company handles all of your design in-house, you will need something more advanced than Canva. In that situation, I would recommend Adobe Creative Cloud to startups who work on their designs in-house, as it includes top-notch design software like Photoshop, Illustrator, Lightroom, InDesign, and more.

“Branding is what people say about you when you are not in the room – Jeff Bezos

2. Visuals & Creative Imagery

Have you ever wondered where your competitors get those beautiful branded photographs that end up on their website? While it’s possible that they worked with a photographer, it’s also likely that much of their imagery comes from stock photos.

Here are my recommendations on the exact places to purchase stock imagery to improve your company’s branding:

  • Creative Market – A treasure trove of quality visual imagery where you can buy anything from stock photos, to branding mockups, to social media templates (Facebook cover photo, anyone?), to custom fonts… the options are nearly endless.
  • Adobe Stock – Beloved by designers, and the platform offers tiered pricing plans based on your image needs and download quantity.
  • Pixels – If you’re on a tight budget and just need to grab an image or two for a blog post, you may be able to find what you need on Pixels – which is great because all of the photos and videos on Pixels are free!

3. Social Media Scheduler

You’re a leader. You’re an entrepreneur. Your staff, board, funders, and admirers depend on you to make big decisions, lead the ship, and plot the vision towards your company’s future. You don’t have time to stare at a blank screen every day wondering what to post on Facebook.

By using a social media scheduling tool, you can sit down for a few hours, schedule batches of content, and schedule the dates and times when it will post to your accounts over the next couple of months. Then, once the content is posted, you only need to worry about responding to comments and engaging with your customers. 21st century efficiency at its finest.

Popular social media schedulers include Buffer and Hootsuite, both of which include free and paid plans. Not sure what exactly to post? Check out these social media ideas from influential businesses. And if the idea of writing and planning months of content still overwhelms you, our next tool will help you stay organized and on-brand.

4. Editorial Calendar

When it comes to your content, it’s time to step it up a notch and start thinking like a media outlet. Every piece of content that you put out as a company, whether it’s an e-mail blast, blog post, social media post, podcast, or video, needs to be aligned with your brand.

Each major magazine maintains an editorial calendar which outlines the overarching theme for each of the upcoming 12+ months. By establishing a monthly content theme in advance, they create a framework to generate and organize their ideas.

Consider creating an internal editorial calendar that will guide your startup’s content over the next 6-12 months. The software tool you use to maintain your editorial calendar isn’t that important — I like to use Trello, but you can also create a simple numbered list in Google Docs or Microsoft Excel. You may be surprised at how quickly the creative juices flow once you have an editorial calendar in place.

“Design is the silent ambassador of your brand.” – Paul Rand

5. In-Person Networking

Offline efforts count towards your branding too! And if you run your entire startup from behind your laptop screen, you miss out on ample opportunities to build your business offline and gain local referral partners.

If you’re new to in-person networking, start by visiting Meetup.com or Eventbrite.com where you can browse for events in your area. Think outside the box when it comes to selecting events to attend. For example: If you’re a chiropractor, it makes sense to attend local holistic health meetups. But you could also attend a travel event and meet digital nomads who don’t yet realize that a chiropractor can help them recover after long plane rides.

Remember that you’re not at the networking event to make instant sales, you’re looking for referral partners and connections. Don’t be the person who tries to shove your sales pitch down everyone’s throat upon meeting them.

As you can see, there are many simple online and offline resources that can help you spruce up your branding, reach new customers, and pique the interest of your target market. If you take branding one step at a time and start with the tools above, you will be well on your way to creating a brand that your customers will cherish and remember.

Have you used any of these branding tools before? Are there any additional tools that have helped your startup’s branding shine? Share your thoughts below!

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5 Ways to Deal With Startup Uncertainty

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Starting your own company may sound like a dream come true in your mind, on social media, and to all the people looking on in envy from their office jobs. But when the fantasy fades, you realize how much uncertainty you now have in your life. The inherent risk in any startup is that you are trading the certainty of a normal job for real growth and freedom. What people get from office jobs is much more than a steady pay check and free coffee. It’s a sense of certainty that their lives, work, and finances are in order.

You will have to give up certainty to fully take on the risks of this lifestyle. It will be roller-coaster and something you need to prepare for. Logically, it’s easy to know that. But emotionally, there are so many ups and downs in an entrepreneur’s life. Stress, frustration, and decreased motivation are inevitable.

Here are 5 ways you can deal with startup uncertainty:

1. Stick to a morning routine

There’s many ways to start a morning routine. What’s important is to have a stable, predictable routine. This centers your mind and gives you some order to your day. You manage your business and you can do whatever you want. No boss and no one telling you what to do, it can be mix of productive to outright messy days. By giving yourself some stability, you start the day off in a predictable way so that you can jump into work each day.

It’s as easy as taking your dog to the park, having a cup of coffee, and listening to a motivating audiobook for 20 minutes. You may need meditation to get into the state. Whatever it is that you need to get from a sleepy/hungover mindset to that of taking on the day.

“If you win the morning, you win the day.” – Tim Ferriss

2. Make time for high performance books

Speaking of audiobooks, everyone – especially entrepreneurs, need motivation. Get a few motivating books from other business leaders. This will do incredible things for your mindset and the way you think. Most of them help by keeping you excited for bigger goals. Look for classics from Jim Rohn and Tony Robbins. Or the newer motivational personalities like David Goggins and Rachel Hollis. You’ll be surprised at how much hearing someone’s hardships on their journey will help you on your own.

3. Schedule your week

It’s easy to get a packed calendar working an office job. Everyone else in the company seems to be demanding your time for one meeting or another. Pointless meetings are even the reason some people leave their jobs in the first place. The issue with having your own startup is that while the pointless meetings are gone, so too is any semblance of structure from a filled up calendar.

Spend one evening and fill the upcoming week as much as possible. I recommend Sunday afternoons to think about your goals. Plan big tasks every day throughout the week. That way you always know what you should be working on and stay on track.

4. Hit the gym

This one is actually part of my morning routine and it’s benefits can’t be overstated. Exercise helps fight off anxiety and stress. There’s no better way to funnel your business frustrations more than into the weights. By the time you’re done, your body and mind will be much more relaxed. A necessity when it comes to the tension of being an entrepreneur. Whether that’s staring at your laptop or making sales calls.

“Daily exercise is an insurance policy for future illness.” – Robin Sharma

5. Be grateful

Gratitude was one of the feel good things that I always used to skip whenever it was mentioned. I wanted cold, calculated strategy or tools I could use to build a business as fast as possible. Many brilliant minds in not only self help but also in business, speak about the need for gratitude.

Here’s why it helps me when the business is going through growing pains or everything seems like it is going wrong. I get filled with doubt and uncertainty and gratitude is the quickest way to relief.

Yes, starting your own business is a massive effort, but there is always some job out there. You decided to launch something of your own because you don’t want a baseline existence. You want to grow and build with the freedom someone can only give themselves.

That alone is enough to be grateful. But if you need more, how about that most people are too scared to do what you’re doing. Or that you are taking the time to believe in yourself and live a life of taking chances.

That speaks to your character and self-worth. Much more than the life of quiet misery so many people in the world allow to decide their entire lifestyle. Be grateful you have this opportunity and make the most of it.

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The Best Side Hustle You Can Start Today In Just 15 Minutes

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The best side hustle you can start in 15 minutes is blogging.

It can be writing, making videos or speaking about topics you love through a regular podcast show. All of these acts are a form of blogging.


15 minutes is not long

That’s why blogging is a good choice.

A video that’s less than 15 minutes is easy to make and will work well.

A short piece of writing can be written in under 15 minutes.

A 10-minute audio conversation on one single question will give people heaps of value and detail in one particular area.

Starting is not where the power lies. Doing this side hustle every single day is how you get what you’re really looking for.


Many successful people are doing this

Whether it’s Hollywood actors like Will Smith or writers like Tim Ferriss or musicians like Ariana Grande — everyone is doing it.

Why is everyone doing the side hustle of blogging?

  1. It’s how we connect with each other.
  2. It actually works.
  3. It’s a way to create an audience which can become a business.

I didn’t invent this side hustle

I just tried it for myself and saw how powerful it was.

It got me:

  • New clients for my 9–5
  • A new 4 day a week day job
  • Clients to coach via Skype
  • Features in major publications like CNBC
  • The opportunity to meet amazing human beings like LinkedIn influencer Michael Chapman

The side hustle of blogging gave me meaning for my life

Before this side hustle, I was washed up, uninspired, negative and pissed off with the world.

Spending 15 minutes to start the habit of blogging got me out of my head. It forced me to search all over the internet and find things to talk about. Pretty soon I was spending 2+ hours a night researching personal development and figuring out what I wanted to blog about.

Blogging led me to want to help the homeless, share my very private battle with mental illness, come to grips with my startup failures and share the lessons, and even overcome my fear of public speaking in the process.

Now I have a meaning for my life thanks to the side hustle of blogging. I reckon it can do the same to help you grow and get you to the next level. You can blog about whatever you want and then watch it grow from there.


Why is blogging the best side hustle?

It’s how you be creative.
It’s how you express yourself.
It’s how you grow.
It’s how you attract the right people into your life.

There are many side hustles you could choose. Blogging is one of many. In my opinion and based on my experience, it’s the best. There are so many avenues you can go down.

Attracting what you want in your life has a lot to do with what you’re putting out into the world”

Blogging is a fantastic way to put out more of what’s important to you, into the world. Like a magnet, blogging attracts more of what you put out into your life.


Oh and don’t forget the income

Investing, giving back and making an income are all possible through blogging too. Part of my monthly income comes from blogging.

This allows me to back causes that help those in need, invest in stocks that provide me with a passive income and have money to spend on the occasional treat such as dinner dates and drinks with my co-workers.

That money comes from:

  1. Ghostwriting for other people
  2. Posting on Medium.com
  3. Coaching clients via Skype
  4. Consulting to businesses on how they can create content that aligns with their brand

There aren’t too many side hustles that can do that for you

Seriously, blogging is a game-changer. It’s a habit you can start in 15 minutes and repeat daily without much effort. Choose your poison — writing, video or audio — and then get started.

Do it for around twelve months and then send me an email with what you experience. I already know, having challenged lots of people already to start this side hustle, that it will work. It just requires patience and the habit of doing it daily.

15 minutes to start today.

And then 15 minutes every day for the rest of your life.

Try it.

<<<>>>

If you want to increase your productivity and learn some more valuable life hacks, then join my private mailing list on timdenning.net

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