The real step-child of online marketing is affiliate marketing, a tried and proven method for creating sales and advertising websites or products online. Many e-commerce sites owe a great deal to affiliate marketing methods - namely Amazon.com and CDNOW's WebBuy system. But it is not just the big players that have used affiliate marketing to create brand awareness and generate leads and business. Savvy marketers have long realized the power of using affiliates to spread their exposure and grow their business. While affiliate marketing has evolved over the years, the basic premise is the same, an affiliate markets someone elses products or services, and earns a commission on sales generated from the affiliate's website, blog, etc.

Where this business model differs however, is unlike many business relationships where one person profits at the expense of another, the affiliate marketing arrangement is a win-win relationship for both the merchant and the affiliate. The merchant benefits from having a potential army of affiliates advertising his products, which provides much greater exposure and earning potential for the merchant. The affiliate on the other hand also benefits from not having to set up a website, keep track of sales, maintain correspondence with customers, and other business tasks, and can focus solely on advertising and marketing.

Affiliate marketing encourages affiliates to sell or advertise a merchant's products by means of a revenue share or commission system. In the early days of the web when affiliate marketing started, most merchants made use of a Cost-Per-Click (CPC) system where an affiliate made money from every click to the merchant's website generated from the affiliate's site. Because of bad management and the prevalence of fraud, only about 1% of affiliate marketing is now done this way. The majority of affiliate marketing is now transacted on a cost-per-sale basis, where the affiliate receives a commission for every actual SALE generated on the merchant's site that is due to a referral from the affiliate. There is also a small percentage of affiliate marketing that is done on a cost-per-action basis, where the affiliate receives a revenue-share if the person referred from the affiliate's site actually subscribes or registers with the merchant's website.

Marketing affiliate products is executed using various types of marketing techniques. Publisher websites - such as blogs and RSS feeds have become a popular method, as well as shopping and comparison websites, loyalty websites and others. Some affiliates have found ways to benefit from social networking sites such as Facebook, and Myspace, and other online marketers are taking advantage of the vast reach of video sites such as Youtube. There are also many "paid' advertising mediums such as Google Adwords and other PPC's, advertising in ezines, etc.

With literally tens of thousands of affiliate products online, the most difficult part can be finding the "right" affiliate product. When looking for a affiliate product, the affiliate needs to make sure they understand what is required of them and what it takes to earn a commission. Some programs pay for each sale made, others require the affiliate to reach a certain "level' before they can receive a payment. Merchants should provide full disclosure about its policies and if they fail to do so, look elsewhere. Lastly, before promoting a product, it would be prudent to see what others have to say about it. With the speed and grasp of the internet, it doesn't take long for a scam to reveal itself. Use the experiences and knowledge of others to keep from having a bad experience yourself.

Affiliate products come in two main categories; digital and physical. While digital products offer many advantages, they also have some major drawbacks in that there is so much competition from other affiliates selling the same products that trying to make sales can be a challenge. For those looking to sell digital products a good place to start is Clickbank and Paydotcom. These sites do offer a degree of credibility since they tend to be quick to address problems with products sold there. While it can be more of a task to find physical affiliate products, there are some sites such as Commission Junction that provide these types of products.

While e-commerce and the online marketing behind it continues to evolve, one thing is certain, internet marketers will continue to find innovative ways to profit from affiliate marketing now, and in the future.