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But now you have two people promoting your program, not one.
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You do bring up good points from a sponsor's look on things, realistically though I think your numbers are a little too optimistic. I don't think that one person referring another person will result in twice as many joins - nor do I believe that every person who refers webmasters actively promotes the program themselves. It may just have a good percentage (like webcamcash apparently) of referral payout.
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It truly cuts into the profit margin, paying $30-40/join already hurts bad enough.
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I don't know that it truely cuts into the profit margin, perhaps if every single webmaster did it within the program it would. I think affiliates large enough to truely cut into the profit margin are pushing enough volume to negotiate higher payouts anyway.