Put simply, affiliate marketing is an agreement between a merchant and a website owner or publisher. The affiliate agrees to promote the merchant's product on their website or by other means such as email marketing by linking to the merchant's website. In exchange, the merchant pays a commission to the affiliate on all sales generated by the affiliate. Every time someone clicks on the affiliate's link and makes a purchase, the affiliate gets a commission.

In most cases, the merchant will pay the affiliate only when a customer clicks on the product link and actually makes a purchase. Some, merchants, however, do chose to pay a commission merely for clicks.

Affiliate marketing programs are frequently described as a win-win situation for both the merchant and the affiliate because of the pay-for-performance scheme. Obviously, both the merchant and the affiliate enjoy the benefits of affiliate marketing.

The benefits on the merchant's side are lucrative and provides the merchant with a much wider market in which to advertise their products or services. Affiliate marketing gives the product or service the maximum exposure that it most likely wound not get with more traditional advertising techniques. The more affiliates a merchant has, the higher the traffic to their website or product, and the higher the possibility of this traffic converting to sales.

To merchants, affiliate marketing is the equivalent of having a huge army of sales people who will do all the legwork, advertising and promoting and who will only get a commission if a customer purchases.

On the other hand, as I mentioned that an affiliate marketing relationship is a win-win situation, naturally, the affiliate enjoys many benefits also. Foremost among these is the easy way to make a profit. An affiliate earns by placing an ad or link to the merchant's website on his own website, eBooks that he creates, or in any emails that he sends.

Hopefully, prospective customers will click on the links and proceed to make a purchase. As soon as the customer clicks on the affiliates ad link, he is redirected to the merchant's website. If the customer goes on to buy that particular product the affiliate earns a commission. The more referrals there are the more profit for the affiliate.

Affiliate marketing is an effective and popular way to earn money from your own home. There are virtually no production costs, the product is already developed and proven by the merchant and all the affiliate has to do is to find as many prospects as he can to bring in the profit for both the merchant and the himself.

Affiliate programs are usually free to join, so affiliates do not have to worry about start-up costs. There are thousands of products and services you can choose from - affiliate programs can be found for just about every product under the sun. Almost certainly there will be a product or service out there that is relevant to your website, hobby or project.

In addition, becomming an affiliate requires absolutely no sales experience. Most affiliate programs offer excellent support when it comes to providing marketing material. The simplicity of affiliate marketing allows you to become an affiliate marketer at your own leisure, in relative comfort and at minimum cost.

You can build a successful affiliate marketing business right in the convenience of your own home. In affiliate marketing your only responsibility is to find prospects for the merchant; there is no inventory, order processing or product shipping for you to worry about. All these boring things, together with customer service support, are the responsibilities of the merchant.

Finding prospects is not particularly difficult due to the global reach of the internet. You can, of course, intensify your advertising campaign by exploiting more aggressive and productive strategies such as viral marketing. By attracting more prospects you maximise your potential to earn.

Of great benefit also to the affiliate marketer is the minimal risk involved. If the product you are advertising is not making you money then you can dump it and choose another. There are no long-term, binding contracts tying you to products that are not making enough money.

The single most attractive benefit of being an affiliate marketer, though, is the opportunity to increase your income. You can even make a profit if affiliate marketing is only a sideline business. With your own affiliate business you can easily earn extra income, although it is necessary to exert some degree of effort and use your imagination to maximise your earning potential.

I am sure you will agree, affiliate marketing is one of the simplest and most effective business opportunities on the web today.