Many people are confused about what exactly an affiliate program is and how a person can actually earn a residual income through an affiliate program. On the one hand, we see advertisements telling us we can make huge amounts of cash through an affiliate program. Then on the other hand, there are advertisements telling us that any program offering an unlimited income is a scam. So what is the truth? It is therefore very critical that we learn the truth about earning a residual income in an affiliate program before we write if off as a scam.



There are two basic functions in an affiliate program.

Firstly, an affiliate program sells a product for a commission. Some companies set up affiliate programs, whereby the products will be marketed by the affiliates. This is free marketing for the company, at the same time, allows the affiliates to make residual income. An affiliate is given an ID, and usually has a website, which is used to promote the product. The affiliate earns a commission off every sale that is transacted from his website.

The second function of an affiliate program is to build the program by recruiting new affiliates. Besides selling products, the website gives people a chance to become an affiliate themselves. When people sign up on an affiliate's website, the affiliate then gets a commission on anything that affiliate sells. The process continues as each affiliate signs up more affiliates. It is a win-win situation for all involved. To the company, it only needs to do the set up and monitor the affiliate program, while the affiliates do the rest. It is getting an enormous amount of free advertising through the affiliate program. Many companies see the value of affiliate programs and are implementing the programs.

How easy is it to achieve our goal of making huge amounts of residual income through affiliate programs? While it is true that an affiliate who sells a lot of products and builds a team of affiliates under him, who also sell and recruit good affiliates, can make a large amount of money, the process is not that simple though. To begin, setting up a stable and strong team of affiliates is difficult. Out of the many people who are looking to make a quick dollar, half of them who sign up for these affiliate programs never even carry through and end up quitting. The commissions on the product sales are usually low and so an affiliate would depend on the underlying team members in order to make a decent commission. So, it is possible to make a good residual income, but you must be patient because it will take some time to achieve the desired results.

Some people avoid affiliate programs because of its close resemblance to a pyramid scheme. A pyramid scheme involves recruiting people to sign up and making money off recruits. The main difference between a pyramid scheme and an affiliate program is that affiliate programs have an actual product to sell. That also explains why affiliate programs are successful while pyramid schemes fail.

Affiliate programs offer a great and effective way to build residual income. If you work hard and be patient, you will be successful with an affiliate program. Remember, affiliate programs are not scams and are a true way to earn some money.