How Do Affiliate Programs Work

An affiliate program is a partnership with an online merchant - that is, a Web site that sells goods and/or services. Also known as associate, referral and bounty programs; these programs pay their affiliates for referring customers to their business. Most affiliate programs are free and easy to join.

From the merchants' perspective, by partnering with affiliates they are able to increase sales, drive traffic, generate qualified leads and extend brand reach through a low cost marketing strategy.

Affiliating is a win-win situation for both merchants and affiliates. There are essentially three types of affiliate programs.

1. The first are Pay-Per-Sale programs, which are also known as Partnership and Percentage Partners programs. These programs pay either a fixed dollar amount or a percentage of sales generated by your links.

2. In Pay-Per-Lead programs, you earn a set amount whenever your customer fills out a survey or requests a quote or information.

3. Pay-Per-Click affiliate programs are similar to Pay-Per-Lead. Essentially you are paid each time one of your visitors clicks on the link through to that programs site.

As an affiliate, you join merchants' programs, and place their advertising on your Web site.

When someone clicks on one of those ads and fills out a form or buys a product, you get a commission for that referral or sale, depending on that advertiser's payout structure.

1. You join the affiliate program and place links on your site, or in your newsletter.

2. Your visitor clicks that link and buys a product, service or fills out a form.

3. You receive a commission for the sale.

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