by dhwriting

Created on: July 19, 2010   Last Updated: July 21, 2010

The Basics of Affiliate Marketing and How You Can Use it to Generate Big Bucks

Affiliate marketing sometimes seems like it’s the new big thing.  After all, there are all kinds of stories about how affiliate marketing provides a mechanism for enterprising Internet entrepreneurs to make some easy money.  Those stories are true, but this powerful way to generate income isn’t new; it’s been used successfully in the offline world for decades, going by the names multi-level marketing (MLM), affiliate marketing and network marketing. 

The huge popularity of the Internet has however, created several profitable new ways through which affiliate marketing's potential to generate income has tremendously expanded.  If you want to join on the bandwagon and make money through affiliate marketing, you’ll need to understand what it is and how it operates.

So, let’s explore the basics of affiliate marketing and how you can use it to generate income.

First of all, affiliate marketing doesn’t involve directly selling any services or products you’ve purchased for resale.  Instead, your website’s sales messages ask your visitors to buy products or services from a third party, which I’ll call the parent company.  You, as the parent company’s affiliate, are paid a commission by the parent company on every sale it makes to your visitors.  Those commissions can really add up, and they can become a substantial sum of money.  In short, affiliate marketing is a great way to make money without needing to carry any inventory or provide any services yourself.

This is all good, but it gets even better.  Affiliate marketing provides Internet entrepreneurs with several ways to make money in addition to sales commissions.  One of the most lucrative methods is by creating and expanding a team of people into a network, then receiving financial benefits from your team’s efforts.  This is why affiliate marketing is sometimes called network marketing.

Developing a network requires you to recruit people to be members of your team.  In affiliate marketing, this is called developing a downline.  If you enlist a number of reliable, motivated, hardworking people into your downline, you’ll earn a tremendous amount of money because you’ll receive a commission based on every sale made by the parent company that has been referred by one of your team members.  The

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