A popular form of earning residual income through the web is affiliate marketing, or network marketing. Affiliate marketing is a means of endorsing or advertising web sites or web businesses in a way that encourages membership, or creates sales. As the affiliate, you would find ways to recruit people to somehow participate in whatever it is that the business you are promoting for is doing. Every time you get a person to become a member of the site (usually a paying member) or network with a client that leads to a sale, you are compensated. In some instances of affiliate marketing, residual income is generated when the client offers compensation every time the subscriber renewed their membership with them, or every time the subscriber made a transaction with that business from then on.

Many affiliate marketing programs offer the more attractive 'tier style' of doing business. If an affiliate attracts or recruits other affiliates, as the primary affiliate you would receive a portion of the compensation that the affiliate under you is due. If the affiliate you have recruited happens to recruit an affiliate under them, they would collect a portion of their earnings and you would collect a portion of that. The process continues. It is a trickle down effect so to speak, and encourages networking with prospective affiliates in addition to helping to promote the web client you were hired for.

Realistically, affiliate marketing is a great way to generate a substantial primary or secondary income online, but it often takes a while, not to mention a great deal of hard work for you to be able to take enough time away from the actual work for the income you make to be considered residual income and for you to be able to spend a great deal of time focusing on other things.

The secret to creating a residual income from affiliate marketing is to network with prospective clients and put them to work doing the same, and generating sales at the same time. This will lead to a little less work that you have to do while still generating funds from what the affiliates who are tiered under you are accomplishing.

In many affiliate marketing programs, affiliates are paid for leads that they come up with. There are two main ways in which this was done. Occasionally the client would pay the affiliate for a certain number of leads and they would receive an additional sum depending on the number of leads that turned into sales. More often, however, leads that lead to paying members or customers are the only ones that are compensated by the client.