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You may have heard the term "affiliate program" in relationship to making money online and have been wondering just how you make money with an affiliate program. This article will explain the concept behind affiliate marketing as well as what it takes to actually make money with it.

Affiliate marketing is a form of marketing products on the internet. However, when you work as an affiliate, you do not need your own product or service to promote. Instead, you become an affiliate of another company and promote their products. When someone whom you refer to them makes a purchase you then earn a commission on the sale.

Here's an example to help make it clearer. Let's say that you purchased a laser printer that you absolutely love. You tell your friend all about your new laser printer and recommend that they get one for themselves. Then, if your friend went out to the store and bought the laser printer that you recommended, the store would pay you a commission on the sale for sending your friend to them.

Affiliate marketing works in much the same way, except that instead of just telling your friend about the printer, you refer them to the store and the printer using a special link that has a tracking code in it. When your friend completes their purchase the store can see from the tracking code in your link that you are the one who sent them so then they know they need to pay you a commission. Part of the power of affiliate marketing comes from the fact that because of the nature of the internet you can refer anyone - not just your friends - to the great products and services that they need and earn commissions on all of your referrals.

Affiliate marketing is big business. According to Wikipedia, in 2006, affiliates around the world earned $6.5 billion in commissions and rewards - now that's a big chunk of change!

The commission paid out by different stores and merchants varies, however it can range anywhere from 1%-75% or more of the amount of the sale. So if you were earning a 50% commission and referred someone to a $20.00 product, you would make $10.00 on the sale. The merchant then pays you either by depositing the money right into your bank account, sending you a check, or sending you money through Pay Pal.

One of the biggest benefits of affiliate marketing is that you don't have to have your own product, carry inventory or worry about customer service, making it a very hands-off kind of business.

A word of caution about affiliate marketing - there are a number of e-books available that claim that they will teach you how to "get rich overnight" using affiliate marketing. Most of the e-books do not live up to their promises. While they usually do contain some good information, they usually leave out some key pieces of the puzzle so you only get part of the picture. You may find some success, however, rarely will it be as good as promised.

It is important when learning affiliate marketing to choose a reputable source to learn from and to actually apply yourself and do the work. If you would like to read my personal success story with affiliate marketing and learn what helped me to succeed, please visit http://wealthyaffiliate.s1so.com