Affiliate marketing - what is it? It is a very simple process where you as the affiliate sell or promote a merchant's product or service for which you will receive a commission. This process is probably the lowest cost business model when starting an online business, and as such is the most popular method with many newcomers to internet marketing.

This business model exists in many different forms and are commonly called affiliate programs. You join the affiliate program that the merchant is operating that is selling the particular product you are interested in promoting. The most common types of programs are as follows:
1 - Pay per click - each visitor you send to the merchant's site will earn you a commission.
2 - Pay per lead - each lead you send to the merchants site will earn you a commission.
3 - Pay per sale - commission will be paid by the merchant for each sale made at his website.

Each one of the above returns a certain payment for delivering the click, lead, or sale. By far the largest number of businesses utilizing this model work on a pay per sale system.

Many internet marketers will guide the beginner into affiliate marketing because it is considered to be the simplest business model to get started and develop. It is also considered to be the cheapest method of starting your internet business.

Your prime costs will be in the promotion of the product or service. All costs associated with the product, sales page, delivery, after sales services, as well as merchant services set up and costs, will be to the merchants account.

When starting your internet business through affiliate marketing there are five steps to follow:
1 - Find your niche market which shows enough demand as well as a reasonable supply, as well as one that would support future business growth.
2 - Find out what the market is searching for in terms of solutions to problems, or a product/service for which there is a shortage of supply or even a deficiency.
3 - Research the available affiliate products and services for something that will fill the deficiency or fix the problem.
4 - Promote the product by every means available to you.
5 - Although this is not necessarily essential, owning your own website can increase your methods of promotion, but more importantly it allows you to presell the product before redirecting them to the merchants sales page.

The final item regarding your own website needs serious consideration as it will be the way to go to develop and grow your business and to start creating an opt-in list of targeted potential customers.

Creating a trust between you and your customers, as well as your partners, is of prime importance to your business. This trust will serve you well as your customers will gradually consider you to be their expert in this niche and they will take your recommendations and buy. Do not think for one minute that without it you will be able to succeed. Affiliate marketing, like any other business model, relies entirely upon the trust you painstakingly build over a period of time.