What is an affiliate program? Everyone who surfs the web has come across affiliate programs. You may have seen a banner on a website that says, "click here", and once you do, you get access to whatever's being promoted. Or you could click on a link in an email you've received. You're using someone's affiliate program.

Basically, the company that sells the product sets up an automated way for people to be paid a set amount to help them promote their products or services. The links send you to the company's website where you can buy the product. The owner of the originating website or email gets a fee for taking you there.

The bookstore Amazon was the first company to heavily promote affiliate marketing on the internet. Although this type of marketing is ideal for businesses that only operate online, it's also become popular with businesses that have both an online and bricks and mortar presence.

Affiliate programs are an ideal way to make your web site profitable. With the huge range of affiliate programs now available, there's almost bound to be something to suit you and your website.

How it works

Perhaps you've created a website about the city where you live. People find your website while searching for information about your city. Once they've read your pages they check out your recommendations. They might click a link to book a flight there. You get paid a commission. Then they clink your link that points them to somewhere they can book a hotel room. Another commission for you. Then they might want to buy a guide-book or street map. Yet another commission.

Or perhaps you have a website connected with your hobby. Maybe you want to share your enthusiasm about the crafts you do. Your website could point people towards suppliers, books on the subject, magazine subscriptions?the list is endless. And all the time you're earning your commission.

The commission is paid in different ways according to the company you're affiliated to. You can be paid per impression, per click, per lead or per sale. The stronger the likelihood of a sale, the higher your commission will be.

The advantages for you

There's no need for you to develop the products - it's already been done. All you need to do is to pick the best out of those available. You don't need to spend money on making or storing the product. Sending people to your affiliate merchants means you don't need to take or process a single order, or worry about processing payments. You don't have to handle or mail the product - your merchants do that. You don't have to offer customer support. Affiliate programs are usually free to join. You can run your affiliate business part time for a little extra cash while making minimal effort.

Choosing your affiliates

It's worth spending some time making sure that you choose the right companies to affiliate with. Different companies have different requirements. Some require you to have a minimum number of visitors to your website, while others require you to have your own domain name.

The best way to choose an affliate program that will suit you is according to the type of people who visit your website. If your website is about guitars, you're unlikely to have much success with affiliating with a company that sells gardening products. The first thing you need to do is know your target audience.

You also might consider whether you want to join every single affliate program that comes your way. A lot of people find that they make the most money from using only a small number of programs. Also, concentrating your advertisements may allow you to be paid faster.

Sometimes, it can be hard to choose between two similar companies. What works well for someone else may not be the best choice for you. It's not just about how much money you can make -you'll want to feel confident in your recommendations.

You can maximize your income by thinking beyond the obvious. If your website is aimed at parents, obviously you might think of affiliating to a toy company. But what about books, clothes, videos, DVDs, child oriented software?

If you're thinking about affiliating with two similar websites, you might want to choose the one that easiest to use or offers the greater benefit to a visitor, even if it pays less in commissions. You'll do best with programs that represent a subject you're personally interested in. Your own interest in the subject will entice others.

To join an affiliate program, you simply go to the site and complete their online application form. Some programs approve you instantly, while others check out your application before it is approved. Once it's approved, you're given some HTML code that you can cut and paste onto your web page.

How do I make my money?

Before joining any program, you should probably be aware of the different payment programs available.

Pay Per Impression
Here you are paid according to the number of times the advertiser's banner is displayed on your site. The amount paid is usually small, but it is easy to earn as everytime a visitor loads the page, you earn. The more vistors your site attracts, the more you earn.

Pay Per Click
With this method you're only paid when visitors click the advertiser's banner on your site. It generally pays higher than the pay per impression program. You'll get better results if your banners are carefully selected to suit your target audience.

Pay Per Sale or Lead
You only earn if your visitors click through the banner and buy the product or service.

Often, to avoid wasting resources in issuing checks for very small amounts, advertisers will accrue the amount owed to you until it reaches a certain amount before they pay you.

How do they keep track of referrals?

Every affiliate banner or link that a visitor clicks on has some type of coding added to the URL - this differentiates it from other affiliates' links. The most common means of tracking affiliate links is by "cookies" Cookies are tiny files stored on your computer by a web browser when you click on an advertising link.

Cookies are generated to track visitors to websites. This is how they can "remember" what you bought when you visit there again. For an affiliate company, the cookie records information on which affiliate referred the visitor to the company, and when. As some computer users block or delete cookies, there are other methods used to track referrals. For example, CGI-based scripts related to the individuals affiliate code attached to the URL links and database matching algorithms are used. Second tier programs

A two tier program allows you as an affiliate to sign up other affiliates under you. You earn a smaller commission on the referrals or sales that arise from their advertising efforts as well as your own.

This costs you far less time and money for each sale if some of them aren't yours. In effect, you have your own sales force and pay a commission to your sub-affiliates. Except that the commission comes out of the affiliate company's profits rather than yours.

The affiliate company benefits by a possible exponential growth of its sales force for no more effort on its part - you're providing that. It's not hard to recruit people under you in two tier programs.

A second level can be a great advantage to you as an affiliate. Even if you only spread the word amongst friends and family, you never know when someone who signs up under you will really take off. They could earn you a lot by their own efforts in spreading the word about a program. You might not get rich, but you'll get some welcome extra income.

A multi tier affiliate program builds on the concept of a two-tier program. Not only can you earn from sub-affiliates, but you can also earn from their sub-affiliates, and perhaps their sub-affiliates. With a two tier program, you have an incentive to sign up sub-affiliates. A multi-tier program gives you the incentive to help your sub affiliates sign up others.

Is it for me?

If you have a website then there's guaranteed to be an affiliate program to suit your needs and audience. For minimal effort you can make your website earn money, even while you're happily sleeping. Perhaps it won't make you a fortune overnight. And it's true that no-one hands you money for doing nothing. But with some careful thought and planning, choosing an affiliate program that fits in with YOUR website and sells products that YOU are confident in is a straightforward way of increasing YOUR income. And it costs you nothing.

Shanon Lewis is a web marketing specialist with over 7 years of search engine placement, e-mail marketing and affiliate management experience. She is part of the expert team at affiliateprograms.com, the premiere affiliate programs directory online.