Affiliate marketing represents a marketing practice that consists of the promotion of products and services belonging to another party. The affiliate signs a contract with a mother company for the promotion and sale of specific products and services; the retribution for this kind of activity is commission-based. There are four main players in this kind of industry: the merchant or the brand (the mother company), the network, the affiliate (publisher) and the buyer (customer).

The affiliate system has grow so complex in recent years that now there are super-affiliates, affiliate management agencies and lots of others specialized vendors. The promotion strategies and methods that characterize affiliate marketing are pretty similar to those used for regular Internet marketing, even if when going into details, differences are likely to appear too. Pay-per-click advertising, search engine optimization, e-mail marketing, banners, Adsense programs and many more can be used by affiliates to promote their business.

The most common and popular form of revenue sharing that is currently used for affiliate marketing is the cost per sale (CPS), which means that the affiliate earns a commission for every sale. Other types of payment models are cost per click, cost per action or cost per mille. With cost per mille, the advertiser is paid simply for advertising on his/her website. With the pay per click platform, the commission is generated when the visitor clicks on the add on the affiliate's page.

Due to click fraud problems, the pay per click model is currently less used, having been replaced by the cost per sale model. Nevertheless, in some parts of the world, such forms of advertising are still in use, as it happens with China.

As the online market has reached a maturity level in the West, the competition has increased, the marketing strategies have diversified and improved in quality. The affiliates have to work hard and perform well in the market, in order to be able to make money. And this is only possible if they are competitive, if the right strategies are implemented and if the affiliate pays attention to the market trends and acts accordingly.

It is also possible to become the affiliate of an affiliate, as it happens as part of networks. In such cases, the commission is distributed hierarchically depending on the sign-ups and sub-partners. This kind of business is known as multi-level marketing and it slightly differs from standard affiliate programs.

There are hundreds of websites today that offer advice and details as to how a person can earn millions in a few years time. These are basically ‘get-rich-quick’ ideas that rarely work out most of the time. The Internet is a great place to make money and affiliate marketing is a part of it. Although many of the get-rich-quick ideas require you to do a lot of work for a small cost, many ideas are designed to work only at a high start up cost. These ideas usually have a high failure rate and are not opted  for by individuals who know how the system works. Affiliate marketing is quite different from various other ways of earning money online and has its set of distinct advantages. Let’s look at a few of them.

Usually when a person markets their product using direct marketing or any other method, they are restricted to certain geographical areas. Affiliate marketing works in a way where you can sell anything to anyone around the world, as long as they have an Internet connection. The Internet serves a global audience and thus the advantage of marketing your product or service to millions of people. This can also be an advantage if you are serving a niche market. For instance, there may be a few people who are interested in the product you are selling. But with affiliate marketing, you will have customers from all over the world with similar tastes that want your product.

Affiliate marketing gives you the chance of selling to a specific niche. To further clarify this, affiliate marketing lets you choose a program that aligns with the niche you are targeting. Amazon is a retailer that provides such affiliate marketing programs.

Another advantage of affiliate marketing is the ability to make money even while you are asleep. For instance, if you live in America and your potential customer lives in Australia, he or she would be able to click on the referral link and make a purchase even when you are fast asleep. Your presence need not be there for a sale to take place.

Affiliate marketing is cheap and easy to start as most companies that provide affiliate marketing programs don’t charge the affiliate when they enter into the affiliate relationship. When you have a referral link, it makes promoting your product easier. For example, you could paste the link on your blog, post it on forums, etc.