Affiliate marketing is the paid publicity done by a website publisher for an online merchant. The online merchant may be a dealer providing products or may be a service providing enterprise. It is one of the methods employed in Internet marketing, especially by those people dealing with the industry sectors like retails, finances and online gaming.

With the growing number of e-commerce projects, commercial websites and portals, the publishers are in dire need of revenue to keep their projects on track. At the same time the merchants want to expand their business opportunities to cover online marketing in terms of audience members. The websites of the publishers give merchants the visitors, some of which can be converted into buyers. They also give the merchant's additional platforms to communicate to the audience and build a rapport with them.

One of the primary requirements of affiliate marketing is a commercial website or blog. Blogs usually do not generate much revenue, and therefore when we talk about web resources of the affiliates it is either their own website or portal. However the marketing can be done in several ways – by putting the advertisements of the advertisers on the website, by sending promotional e-mails to the users or by contributing articles in e-magazines on behalf of the merchants.

One of the pivotal concepts behind online affiliates and successful online business is the return on investments, also written as ROI. By allotting marketing and advertising tasks to the affiliates, the merchants basically make an investment, the returns of which get reflected by sales generated due to those marketing efforts. Affiliate marketers boast about fastest ROI and it is very true. It is more in case the affiliates are directly selling the merchants goods on his (affiliate’s) own site, rather than promoting a band.

The revenue sharing between affiliates and merchants is devised as commissions and referrals. The commissions determine the part of profit money which any merchant shares with his affiliates. With affiliate marketing being endorsed by a lot of people in the industry, online business is yet to show its true potential.