Meaning of Affiliate

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1. Affiliate

Website affiliates are what drive Internet marketing. Companies run affiliate programs to generate leads and sales from other Websites. They pay the sites who host their ads a commission for products sold through the links on their sites. For example, if a site owner signs up for Amazon.com's affiliate program, he will receive ad banners or links from Amazon.com that he can place anywhere on his site. Then, if a visitor clicks on the Amazon.com banner or a link on his site and buys something, he will receive a commission. Unfortunately for Website owners, affiliate commisions are seldom above 5%, since most Web sales are made with small profit margins.

The introduction of Website affiliate programs in the late 1990s brought Internet marketing to a new level. The first companies that offered these programs saw sales increase dramatically. After all, these companies basically get free advertising and only pay their affiliates a percentage of the sales they generate. It is a win-win situation for the company that runs the affiliate program. The only drawback is that the programs take a lot of work (and sometimes a lot of money) to set up and maintain. Thus, smaller companies may not find it very beneficial to offer an affiliate program.