Affiliate marketing is an Internet-driven marketing system by which a person becomes an affiliate for an online merchant. This usually involves paying a one-time fee for membership, and this fee is usually less than $100 and has a limited time money back guarantee. Once you are an affiliate with the merchant, you are given everything you need to facilitate sales for them. All of the selling is done via the Internet. You don't do any calling and you don't stock any merchandise. Your job is to set things up online so that people to go the merchant through you. Every time someone goes to the merchant via your website, you get paid a commission in accordance with the system you have set up.

Affiliate marketing benefits merchants as well as you. For the merchant there is very little overhead, no payout unless there is definite sales activity, and very inexpensive advertising that reaches millions of targeted prospects. For you, there's no need to go to job interviews, no need for a special degree, no commute, extremely low start-up costs for running what is essentially your own business, and the chance to make a killing while setting all your own hours and working on your time instead of someone else's.

There are tens of thousands of affiliate marketing opportunities on the Internet already. There are a few different types of affiliate marketing programs.

With PPC (pay per click) affiliate marketing, the most prominent type, you allow the merchant to place free advertising at your website, even if your website is not a marketing website per se. Whenever a visitor to your site clicks through one of the ads to come to the merchant's website, you get paid a commission even if they don't buy anything. In many PPC setups you get paid more of a commission if they do make a purchase. These commissions are very small, often less than a dollar, but if you generate a great deal of traffic to your website many, many people will click through just according to the law of averages, and because the advertising is all targeted to the kinds of people who would be interested in what the merchant sells as well as your website content. Those small commissions can add up very quickly.

However, the rising star in affiliate marketing, and the one preferred by merchants and probably the one potentially the most lucrative for you, is PPP (pay per performance). This "performance" is defined as either a referral through your website to the merchant's makes a purchase, or the referral becomes a lead which shows great promise of becoming a future customer. With the PPP scheme, you won't receive any commissions just for a click-through, but if the merchant gets a sale or a hot lead out of it, you will get a substantially larger commission than you would with PPC. This commission may be as high as 20% of the sales price if a purchase is made. If the merchant gets a lead out of it, they will pay you a fixed fee that has been pre-arranged. Some schemes specialize in just one or the other.

Some other affiliate marketing plans include upward mobility where you can earn more money per activity once you have generated a certain income level for the merchant, or you can bring in new affiliates under you and earn a portion of what they generate for the merchant in addition to what you sell directly. Still other affiliate marketing programs allow you to get paid for every purchase made by a customer who made their first purchase via your website, even if they make new purchases many months or years apart.