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CouponTrade Can Help Attract Customers Through Unused Deals

October 15, 2011
URL: http://www.entrepreneur.com/article/220413

A Fair TradeThe Groupon and LivingSocial gamble for small businesses: Will people rush your store en masse to cash in their chits? Or will they print them and forget them (and forget about your business)? A new option: Sit out the deep discount game. Via CouponTrade, you can use other businesses' buzz to attract new customers to your company.

Founded last winter by George Bousis and Brad Wasz, CouponTrade is an online marketplace where consumers sell unused gift cards and daily deals, and businesses peddle coupon codes, digital coupons and discount gift certificates.

In June, Groupon sold 10,000 two-for-one passes to Chicago's Shedd Aquarium. Shoppers who bought first and read the fine print later realized the offer was only good for Wednesday evenings. Rather than waste the tickets, many resold them on CouponTrade, where a range of other deals--including offers from local grocery store chain Cermak Fresh Market--waited.

After an item sells, CouponTrade collects a 99-cent listing fee and 10 percent of the value of the transaction. Bousis (whose family owns Cermak) says that with a profit margin of 30 percent, grocery stores can't afford to offer steep daily deals, but "Cermak can survive by selling gift cards on CouponTrade because the margins make sense."

CouponTrade's affiliate program could provide an additional revenue stream for online businesses.

E-tailer Tanga has hosted CouponTrade's interactive ads since May, earning between a 4 and 7 percent commission on sales generated. CouponTrade also pays a $2 to $3 bounty to sites that send active buyers their way. According to Tanga CEO Jeremy Young, in the first month the company collected $175 for the $2,500 in traffic it generated for CouponTrade. Young estimates Tanga will provide at least $50,000 worth of traffic over the next year.