Nate Lance thinks the combination of two marketing concepts — the barter network for business owners and the “daily deal” for consumers — can breathe fresh life into the deals business.
Lance, the owner of Western Trade Alliance in Reno, has signed up about 2,500 consumers through www.bumbledeal.com to receive about three offers a week from Reno-area businesses.
The difference between Bumbledeal.com and bigger competitors such as Groupon and Living Social?
Retailers who market deals through Bumbledeal aren’t spending any cash. Instead, it works like this, using a restaurant as an example:
The restaurant wants to provide half-priced meals to a certain number of consumers.
It buys half-off certificates from Bumbledeal, which pays for them with credit that the restaurant can use with Western Trade Alliance. (The barter exchange lists goods and services from about 600 participating businesses in Reno and Las Vegas.)
Bumbledeal markets the certificates to its e-mail list of consumers, selling them for cash. Generally, the deals are available for purchase by consumers for a few days — unlike the one-day-only pitch of other deals sites.
Lance says the Bumbledeal model has appealed to retailers who like the daily-deal concept as a way to bring gaggles of new customers in the door, but have choked at the costs.
Groupon, for instance, splits the proceeds of selling a certificate with the retailer, typically leaving the retailer with about 25 percent of the retail value of the deal.
Even though Bumbledeal isn’t providing cash to participating retailers, they’re getting full value in barter credit, Lance says. (Western Trade Alliance collects a 6 percent fee on barter transactions.)
For consumers, meanwhile, Lance says the longer shelf life of deals on Bumbledeal helps build loyalty.
Still, he says marketing the program to consumers has been a bigger chore than he thought when Bumbledeal was launched early this year.
“Getting those users has been difficult, and it’s been expensive,” he says.
Adding to those challenges is the affiliation that media organizations in the region have with other daily-deal providers, affiliations that sometimes throw a roadblock in front of Bumbledeal’s marketing plans.
And, like other small businesses that have attempted to carve out a little turf in a land where giants roam, Lance faces the daunting size of his competitors. He estimates, for interest, that Groupon alone is delivering deal offers to about 100,000 users in Washoe County.
For Bumbledeal, an obvious next step is expansion into the Las Vegas market, where the two-year-old Western Trade Alliance already has established relationships with barter clients, Lance says.
