Referral Trading for Fun and Profit

2007-03-02 12:35

You've all noticed those "Click here for a free iPod" banners at the top of a webpage before, and most people write these advertisements off as some sort of scam. But in actual fact, there are several legitimate "Incentivized Freebie Websites" (IFWs) which DO give out free iPods. So what's the catch?

IFWs operate on a simple principle. Sign up, complete an advertiser's offer, and refer a certain number of other people to sign up under you. Unlike pyramid marketing schemes, each person who signs up has an equal opportunity to get a prize, and there is no advantage to being at the "top" as everyone has the same requirements and can get the same rewards. The catch is that your referrals only count if THEY also try out one of the advertisers' offers. This is because the payout that the IFW receives from the advertiser is what is used to pay for the freebie.

It's not impossible to find enough "gullible" friends to sign up under you for your freebie, but it is tough, and that's where referral trading comes into the picture. When the IFW craze really started to take off, several online communities sprang up including forums where members could trade referrals. Although each person can only sign up for each IFW freebie once, there are enough different sites out there that people could trade signups with other members in order to complete their own freebies.

If you've signed up for one freebie and don't want to sign up for any more, all is not lost, however. Many people wanting to make a quick buck online are willing to be paid to be a referral (to sign up under the payer and complete the offer requirements). Of course, paying for referrals takes away the "free" aspect of a freebie, but with the average prize value of a referral at about $40-$50, and a going rate for referrals of around $15-30, it's still possible to make a tidy profit even while paying people to sign up. Paying for referrals is also an easy way to finish off a site where you need just one or two more signups to complete the prize requirements.

Anytime money is exchanged online, there is a rish of being scammed. This is why freebie referral trading communities such as and have strict trading policies and "trader ratings" which indicate the reliability of the trader (usually based on the number of successful trades so far), much like the feedback system on Of course, despite this system there will always be the chance of losing money this way, but the majority of the time, referral trading works in the favour of both parties, allowing both traders to make money and freebies, as well as making friends in the process.

IFW Referral trading allows freebie enthusiasts a way around the "catch" which brings profit both to the company and its clients. The company increases their memberbase through the number of new signups, and the clients are able to finish the site requirements and receive their prize. Everybody wins, and some great communities are now firmly established which should survive as long as IFWs are around, and probably longer.

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2009 January 11, 14:48 Denise wrote :
Excellent article and certainly true. I\\\'ve used referral trading forums to my advantage...the way I do it and make sure I don\\\'t get scammed is by telling the other traders they must provide me with their usernames on the sites before I go and give them credit to their links. I then check with the companies and it is usually a quick and painless process...I will gather a list each week and send it over to them and ask to confirm that they did sign up.