Interested in how the different referal systems work? Read on and compare!
We will start with the most commonly used version. The red blob with the text on him is You. Now let’s say you send out a referal link to your friends, two of them actually sign up, and they tell other people about the site, who in turn sign up, and it goes on and on. Looks a bit like the way battles are aligned, doesn’t it? Starting at the winner and moving towards the total contestants. The way the money flows in this system is normally based on a certain percentage. If the referral percentage is 20% ( a pretty common percentage ), you’ll receive twenty procent of everything those two users earn! In most systems you get a set percentage of your referrals referrals as well, the second line of users. Here the percentage might be smaller, say %10, and for further referrals you earn nothing at all.
In some systems you earn a set percentage for all referrals that are referred by anyone referred by you, and if such is the case, then it’s a real gold mine. The money that your referred users gain on referrals don’t give you anything though. If you yourself have been referred by another user, this has no effect, you’ll still earn the same amount of money. The person who referred you simply earns a percentage out of the total income for this specific service. I’ll give you a simple example :
Lets say you sign up for a service in which you click on links for a set sum of money. Lets say that this set sum of money is $0.07 ( a common sum ). This is only a percentage of the total, all in all the company offering this service to you might earn $0.1 for every link. They then hand out 10% of the money to the user who clicks the link ( 0.07 ), a certain percentage to the person who referred that person ( if it’s 20%, then $0.014 ), and a percentage to any additional referrals as well. They still earn a lot of money, lets use the current example again and they’ll be earning $916 for every thousand clicks. As you see they’re pretty greedy, but they pay their taxes as well – they pay for hosting – and they manage the site, which is a fulltime job. They sign deals with advertisers as well, and the more they earn the more they have to work, so as I see it it’s all fair.
Another more basic type of referral system is the one where you get a set amount of cash for everyone who signs up thanks to you. Sites that use this type of system usually offer paid products or services. Offering a set sum of money for referrals that might not be active is pretty risky, and therefore they sometimes add a little catch the to agreement. Something like
“…if the referred user buys hydraulics for $20s worth and refers two other users who do the same thing”
Their role as the real moneymaking factor in your relationship is pretty eminent now, but that’s only fair. The downside to referral systems such as this one is that you’re much less likely to make money from it. Even if the user signs up, it’s not probable that they’ll refer more users even if they do buy hydraulics or $20. So watch out for catches like this, even with the other type of referral systems.
If you’re looking to make money when signing up on a site, referrals are an important aspect. So take a good look at any referral system they might have, and an even better look at the referral percentage. Even if you don’t have much time to work yourself, you can count on the people to refer to make money for you. When you see a referral link posted by somebody else, why not sign up? I’m sure you’d want others to do the same thing. 
