In the past few years, affiliate marketing has become one of the most popular ways to make money on the Internet. Unlike traditional retailing, affiliate marketing offers the opportunity to earn money without having to stock or ship merchandise, which makes the cost of entry into the business affordable for just about anyone. It's even possible to make money online without having a Website. While it is not necessarily easy to earn money as an affiliate, it can be easier than just about any other online business model.

Affiliate marketing is a system whereby an individual partners with the seller of a product to promote that product on the seller's behalf. If that individual helps make a sale, he or she receives a portion of the sales price for the effort. This works well for sellers and manufacturers, as such marketing provides them with a de facto army of salespeople who get paid only if the product sells.

There are three primary ways to earn money as an affiiliate:

The pay per click, or PPC model. A good example of this would be Google's Adsense ads. Affiliates can elect to have Google ads placed on their Website. Those ads will be related to the content of the Web page itself. If the page is about cars, Google will place car-related ads on the page. If a visitor to the page clicks on one of the ads, the owner of the Website receives a payment of anywhere from a penny to a few dollars. With Adsense, the Website owner is effectively working as an affiliate for both the advertiser and Google, as Google is making money from the advertiser and the Website owner is receiving money from Google.

The pay per sale model may be the most popular model on the Internet. With pay per sale, the seller gives the affiliate a special hyperlink that contains identifying information for the affiliate and connects to the seller's Webpage. The affiliate can send the link to a mailing list in an e-mail message or list it on a Website. If a customer clicks on the link and buys the product, the affiliate receives a portion of the sales price.

The pay per lead model is interesting in that the customer need not buy anything for the affiliate to get paid. Pay per lead is common in the insurance industry, where companies will pay just for providing customers who ask for insurance quotes. Affiliates receive a link, just as in the pay per sale model, but get paid if a customer signs up for a free estimate. The payment is much less than the pay per sale model, but pay per lead can be quite profitable just the same.

There are other methods of earning money in online marketing, but the three listed above are the most common. All three methods are effective, but each one is suited to different kinds of business. The savvy marketer will want to take advantage of all three methods in order to maximize earnings potential, as each of them works best in specific situations.