What is affiliate marketing? In its simplest form, it is a way for web businesses to promote themselves by paying a publisher (or affiliate) a small percentage every time the business makes a sale; someone visits their website; or subscribes to their e-mail newsletter, thanks to the direct efforts of the affiliate.



One of the leading affiliate marketing programs may be Amazon, who was one of the first to introduce the concept in 1996 with the launch of their Associates Program, As part of the program, individual authors and small publishers are able to link their websites to Amazon, thus taking advantage of Amazon's large customer base. In return, associates pay Amazon a certain percentage for every title sold through the site. The success of affiliate marketing depends a great deal on how many sites a merchant can link itself and the quality of those sites -- in order to generate a larger customer base.

Online merchants love affiliate marketing for the simple reason that it's free until, of course, the affiliate brings in business. Few other marketing models allow a business to "pay for performance," which makes it a wonderful way for new start-ups and smaller operations to utilize the marketing services that may have otherwise been beyond their reach.

There are two ways to run an affiliates marketing program:

1: Run your own program in-house, which require a lot of maintenance and work

2: Outsource your program, which seems to be the best option for most e-commerce businesses

Finding an Affiliates Program:

There are several directories available that can help you find affiliate programs that fit your needs. Affiliate networks are also available online that can provide information on hundreds of advertisers.

When searching for an affiliate to link to, keep in mind that most programs work within the following categories:

-Search Affiliates (PPC).

-Comparison-shopping directories.

-Loyalty sites: Offering special discounts or bonus points for sales.

-Coupon and rebate sites.

-Content sites: Product reviews, with a link to the product website.

-Blogs and RSS feeds.

-E-mail Lists.

-Registration / Signups.

Multi-Tier Programs:

One danger to watch out for when entering affiliate marketing for the first time, are multi-tier programs, which distribute commission through a hierarchy (or pyramid) style referral network. Working much like the "pyramid" programs of the 80's and 90's, multi-tier affiliate programs reward level one affiliates for referrals from levels two and above. A reputable affiliate should be generating income from the referrals it brings in, not the referrals someone else's program is soliciting.

Affiliate Marketing can be a wonderful way for a new e-commerce site to gets the news out about their site. The important thing is to research each affiliate carefully to ensure that you are linking your business to a reputable site that will enhance your business, not hinder it.