by David Nguyen

 
Affiliate marketing on the Internet is simply a commissioned sales process involving potential customers, an affiliate (the "salesman") and a merchant.

The merchant has an arrangement with the affiliate where the affiliate is compensated when a customer he refers to the merchant responds to the merchant's offer. This "sale" can be:

·A purchase
·A request for information
·A visit to the merchant's web site
·Or any other measurable action

In return the affiliate receives financial compensation:

·A percentage of the sale (pay per sale)
·A flat rate per sale (pay per sale)
·Or a flat rate per other action (pay per lead)

There are many compensation plans, though most are now based on one of these three, or some combination thereof. Affiliate marketing is also referred to as "pay-for-performance" marketing.

If it is based on selling goods and services at a profit, and a percentage of that profit is paid to affiliates for generating sales, then it is a sustainable business.

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