Basically we have two kinds of affiliate marketing strategies. There is the one-tier program in which the affiliate is barred from recruiting sub affiliates and only makes commission from his personal and direct sales effort. In the two tier program, or multi tier programs, the affiliate can recruit sub affiliates and can make commission from the commission from the sales his sub affiliates generate.

The program works in a simple manner - an interested affiliate signs up via a web form and then obtains banners or text links to promote your site. If a buyer clicks a link and follows through to buy a product or patronize a service, the referrer is noticed and then compensated accordingly.

Website owners have all to gain if they get involved in affiliate marketing. First, they can build a formidable and highly motivated sales force without spending any money. Second, they are assured that any payment made to the affiliate is derived from a sale he has made from his promotional effort and not that of the website owner.

There are two ways to set up an affiliate - you can join an affiliate program such as Commisison Junction or LinkShare or get your own proprietary affiliate software. If you intend to set up an affiliate program, you will need to work out the programs terms and conditions, affiliate commission and provide banners or text links that affiliates will display on their sites to refer visitors to your site.

If you intend to set up your own affiliate program, you may have to ensure that your affiliates are highly motivated. Research has shown that affiliates have one thing to fear when it comes to such issues - affiliate link hijacking. Affiliate link hijacking is the unethical practice of someone replacing his link with that of another so that the perpetrator gets the sale instead of the real owner of the refer ID. You can overcome this bad practice by masking the URL so that it does not show in the browser, hiding the page source or using a zero-frame to hide the affiliate URL.

Lastly, you should be very carefully about affiliates who will spam in order to push sales through. Sometimes through over enthusiasm an affiliate can apply unscrupulous means to generate sales or promote the products. If such a thing happens and spamming is detected, the search engines scan ban your site and thus endanger you total SEO efforts.

Affiliate marketing can help you generate a large sale force in no time and help reduce your website promotion costs. However like any commercial endeavor, people will try to cheat and endanger your reputation so look out and stamp out these acts before they stamp you out.