This “pay-for-performance” model is the modern version of the “finders’-fee” where individuals who introduced new clients to a business were compensated. The difference in the case of affiliate marketing is that advertisers pay their publishers only when the new client introduction results in a sale or a lead, making it a low-risk, high-reward situation for both parties. 

For example, lets say that you told a few friends that you enjoyed shopping at 'Store A' because of the great prices and other benefits, and lets say that 'Store A' also has a referral program where you can benefit by referring others. Lets also say that you promoted their link on your website and you got some referrals from that. Now 'Store A' would send you a bonus check (or other specified benefit) every month from the sales generated by your referrals. It's a win -win situation because 'Store A' wins by gaining a few more customers (customers it may never have got without your help); and you win by making a few extra dollars for doing something that you would have been doing anyway -for free - which is talking about your great deal or shopping experience.

How Does It Work?

Advertisers (online merchants) provide their publishers (independent parties that promote the products and services of merchants and advertisers) with specially configured ad links to their products and services, making them available for placement by publishers on their websites of choice. Each link is assigned a commission, such as a fixed amount per lead or a percentage of a resulting sale. 
Publishers looking to monytise their web sites' traffic apply to join an advertiser's program. Upon acceptance, the publishers select and place the advertiser's links on their Web sites, in their email campaigns or as part of their search listings. 
When a consumer/customer clicks on a publisher's link, a cookie is set on the visitor's/customer's browser that identifies the advertiser, the publisher, the product or service, the ad, the specific link and the payment rates. 
When the visitor/customer makes an actual purchase online or fills out a form, that transaction is tracked and recorded. 
Upon recording the transaction, the online merchant/advertiser then handles all of the administration, verification, collection and processing required to ensure fair and timely commission payment to the publisher. 

Why Does It Work?

These days more and more smart companies are using some kind of Affiliate/Networking/Referral Business Model to promote their products and/or services because it makes more sense and costs them a lot less (in advertising). 
They realize that "word-of-mouth" advertising is the most powerful advertising around and is also the cheapest to buy. It is much more cost-effective than Billboards, Direct Mail, Magazines, Newspapers, Radio and Television. 
It makes much more sense to share just a small percentage of the profits of each sale brought in by a publisher with that publisher, thereby enabling that publisher to spread the word even more and to profit even more. 
The advertiser (merchant), also automatically benefits from that publisher's success. 
Many companies are now even offering Affiliate/Referral/Network Marketing programs that offer 3, 4, 5 or more levels of referrals for publishers to fill with their referrals. These programs offer publishers like you and I great opportunities to build large networks that can produce large monthly incomes for us. The real beauty of this is that it can all be done in your spare time. Just imagine if you were to do this full time. 

You Could be Sitting on a Gold Mine! 

If you could just imagine for a moment, (and I'll keep it simple), that you were working with a company that offered a 2 x 4 referral network; meaning  that you could refer 2 people on your first level, but refer up to 4 levels deep. Lets say that you referred your first 2 people and it took you a month to do it and your first 2 people did the exact same thing as you did, then by your second month you would have 4 people on the second level (2) of your network.  As you continue to build your network, by the third month your third level (3) would consist of 8 people, and as you finish your fourth month your network would fill itself with 16 people on the fourth level (4). Your full network would now consist of 30 people. Now, you may think that this is NOT a lot of people, and it isn't, but I've kept this example simple just to show you the concept of Affiliate Marketing and HOW it all works.  Now lets' see that again... 

 you are here

Your 1st. level - you referred          2 people       Month 1.

Your 2nd. level - they referred     4 people       Month 2.

Your 3rd. level - they referred        8 people       Month 3.

Your 4th. level - they referred      16 people       Month 4.     

For a total of                               30 people      

Remember, this could all happen even faster!

Now this may not be much, but this is the basis for a good part-time monthly income.  

Let me explain further... 

Depending on the company and /or the pay structure for this model, it could mean that you could earn a nice monthly income that continues to grow. For example, what if the company pays you a set amount - say $10 - for each referral in your network; that would be 30 x $10 = $300. per month (each month); - not bad for referring only two (2) people. 

It gets even better than that!  

What if the company pays you a percentage on products and services used and sold by every referral in your network - say 10% - and each referral averaged say only $200. per month - that's 10% of $200. x 30 = $600. per month (each month) - again, not bad for referring only two (2) people.  

To expand it even further.... 

What if the referral program was a 3 x 4 network? That would mean 120 people working for and with you, then your monthly income would be.... (fill in the blanks)_________.    What if it was a 4 x 4 network - that would mean 340 people working for and with you, then your monthly income would be...._________.      

This is just an example that I have been using to teach you the concept of Affiliate/Referral/ Network Marketing and how you can benefit from it, but to be realistic, the programs that most companies are using today consists of much larger networks. They may be 3 x 7 or larger, which means having a lot more people in your network; Now we both know what that could mean for your family, your life or your lifestyle.     

Here is a question for you! - What would your life be like if you excelled at not just one (1) but 2, 3, 4 or even more different referral networks with different companies?!

   
Here are Just three (3) of The Many Benefits of Affiliate/Referral/Network Marketing!

1/ - A simple change of your buying habits could mean a monthly rebate from participating companies.  -Your cost-of-living goes down.
2/ - If you use a product or service that you like, that is being offered by a company with a referral program in place, don't keep it a secret. Other people may also like these products and/or services and you can earn a bonus for referring them. 
3/ - You could find yourself with a life-changing new career! 

Many people enjoy the great second income Referral/Affiliate/Network Marketing offers them, while others enjoy Affiliate/Referral/Network Marketing as a full time career. 

To learn more about Affiliate Marketing and how you could make it work for yourself, click here. We're serving up a heap'n help'n of Internet Home Business Success!

Level 1

You Refer 2

Level 2

They Referred 4

           Level 3              

  They Referred 8

Level 4

           They Referred 16            

There are now30 people in your Affiliate Network.

You're on your way to reaching your goals and can now begin to enjoy the finer things in life!