Are you planning to start up an online business but have no idea which product you should sell? Or are you already a webmaster looking for an additional income? Whatever the cases are, affiliate marketing may be the best option for you to solve your problems. This is because with affiliate marketing, you don't need to worry about the products, prices, and the logistics of selling. All you need is a functional website with relevant content and register yourself with a merchant who sell related products. With a great website and a good affiliate program, customers will be enticed by the products you are selling.

Affiliate marketing is actually the relationship established between the merchant and his affiliates. In this type of marketing, the affiliate promotes the products or services of the merchant and he will get commissions for every sale he makes. But affiliate marketing is actually more innovative than that because the merchant can also offer incentives to the affiliate whenever the prospect takes some kind of action. For instance, the affiliate will get paid if a visitor becomes an email newsletter subscriber of just visits the vendor's website.

Compensation for these efforts can vary from percentage of sales or a fixed fee that is agreed upon during the application of the affiliate in the program. This kind of marketing promises a lot of profits for both parties so it is really no wonder that it has become one of the most popular ways to earn money online today. In fact, you will notice that almost all merchants have an affiliate program that virtually anyone can join. Merchants will also entice potential affiliates by promising click through incomes, large commissions, and residual commissions.

Not all affiliate programs offer the same amount of commission though. Often, large commissions (ranging from 15% to 60%) are paid on a one-time basis when you make a sale or if you provide a lead. On the other hand, click through will give you an affiliate fee when you direct a customer to the merchant's site; these payments are usually small but the good thing about it is that the visitor will not need to buy anything for you to get compensated.

The last type that we want to discuss for affiliate programs is called the residual one. Most affiliates ignore this type of program because of its small commission fee (usually 10%-20%) and join those that pay a one-time large commission. But are they making a mistake? It is actually difficult to say for sure but what is certain is that affiliates are making a mistake if they ignore these types of programs. This is because even if residual affiliate programs pay at a lower rate, the merchants will pay you on a consistently and regularly for a single affiliate sale.

To better demonstrate the point, let's look at two web hosting companies who offer their affiliate programs; the first one offers one-time commission while the other offers residual affiliate income. Suppose that the commission you will get for the first one amounts to $80 while you will only get $10 for the affiliate initiated sale for the other. Most affiliates will no doubt choose the first option instantly.

But when you see your referrals remain as the web hosting company's customers, you will start and see the differences. Residual affiliate incomes give you the chance to make money over the long term even when you stop doing any promotion at all.