Instead, you earn a commission for producing a transaction. Affiliate programs, also known as Referral Programs, Associate Programs, Profit Sharing Programs or Reseller programs, give affiliates ability to create an online business selling thousands products and services.

One of first affiliate programs was run by mega- bookstore, Amazon.com. They still have largest base of affiliates on net although they may not be best affiliate program for many! with over 600,000 web sites being affiliated.

Affiliate programs are generally offered by sites selling goods or services, although some affiliate programs reward other types of transaction such as getting a visitor to sign up for a free newsletter, or a download.

Some affiliate programs pay per lead rather than per sale, in other words, you bring them a prospective customer and they pay a fixed "finder's fee" for chance to market to that customer.

This is a typical arrangement for affiliate programs in insurance, real estate and credit card industries, for example:

Types of Affiliate Programs

Pay per sale: If you refer a visitor to online merchant's site and if visitor makes a purchase you get a percentage of sale as commission.

Pay per lead: You get paid a one-time fee for generating a lead for merchant. Usually you get paid $2-$5 if visitor you referred fills out an application.

Pay per click: You get paid for every visitor you send to online merchant regardless of any sale or purchase. Usually companies pay $0.05 - $0.15 per click.

2. Pay your affiliates well for their efforts.

If you're thinking about offering a 10% commission for sales of your product and a competing business is paying a 50% commission for referrals, you'll lose affiliates to your competitor.

3. Make your affiliate program more lucrative by offering residual commissions.

This is an excellent choice if you offer a product that is paid for on a residual basis such as webhosting or access to your membership site.

4. Offer lifetime commissions.

Your affiliates will see power of lifetime commissions, and work hard to promote your business and send you more sales.

5. Make your affiliate program two-tier.

Reward your affiliates by giving them a commission on sales of people they refer to your affiliate program.

6. Don't leave your affiliates out in cold.

Provide your affiliates with lots of sales items that they can use to successfully promote your products.

Some items you could offer your affiliates:

- e-zine ads (sponsor ads, classified ads, 2 liners) - signature file ads - sales letters/solo ads - brandable ebooks - sample recommendations - email courses - your articles that they can reprint with their affiliate URLs in your resource box.

7. Be quick to respond to your affiliates' emails.