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Most sponsors will give you free hosting and full access to content these days. So you're really talking the cost of the domain (less than $10) and the submission software (Advanced Submitter - $98 or approximately $8/month). All that for the right to drop $5/sale? Anything more than 3 sales/month and the affiliate is losing money. Surely you don't convert that poorly. So yes, it is a bad deal.
You might consider INCREASING the payout for select affiliates by $5. You might have better luck with that.
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