How Affiliate Marketing Programs Work

Most affiliate programs are free to join. When you enter an affiliate relationship with a merchant, you agree to place links to the merchant’s site on your site. The merchant agrees to pay you a commission for the traffic you send.

Merchants offering affiliate programs pay in three basic ways:
• Pay-per-sale (or cost-per-sale). When you send the merchant a customer who subsequently makes a purchase, the merchant pays you. Your commission may be a percentage of the sale or a fixed amount for the sale. Amazon’s Associates Program is an example of this arrangement.
• Pay-Per-Click (or cost-per-click). The merchant pays you for every click on the link directing the visitor to the merchant’s site. The referred visitor does not need to purchase anything for you to get your commission.
• Pay-per-lead (or cost-per-lead). You send the merchant a visitor who subsequently signs up as a lead. This means the visitor completes an online form on the merchant’s site. The merchant may then pass the lead to the sales department or sell the lead information to another company.