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In the past few years, affiliate marketing has become one of the most popular ways to make money on the Internet. Unlike standard retail sales, affiliate marketing offers the chance to earn money without having to carry or ship physical products, which makes entering the business affordable for just about anyone. It's even possible to earn affiliate revenue online without a Website. Although it is not necessarily easy to earn money as an affiliate, it can be easier than just about any other online business model.

Affiliate marketing is a system whereby an individual joins forces with with the seller of a product to advertise that product on the seller's behalf. If that individual assists in making a sale, he receives a percentage of the sales price for the effort.

There are three main ways to earn money in affiliate marketing:

The pay per click, or PPC model. A common example of this would be Google's Adsense ads. Affiliates can opt to have Google ads put on their Website. Those ads will be related to the page's own content. If the page is about cars, Google will place car-related ads on the page. If a visitor to the page clicks on one of the ads, the owner of the Website receives a payment of anywhere from a penny to a few dollars. The Website owner is effectively working as an affiliate for both the advertiser and Google, as Google is earning money from the advertiser and the Website owner is getting money from Google.

The pay per sale model may be the most widely used model on the Web. With pay per sale, the seller or manufacturer gives the affiliate a special link that has identifying information for the affiliate and connects to the seller's Webpage. The affiliate can send the link to a mailing list in an e-mail message or post it on a Website. If a customer clicks on the link and makes a purchase, the affiliate receives a portion of the sales price.

The pay per lead model is interesting in that the customer need not buy anything for the affiliate to get paid. Pay per lead is common in the insurance industry, where companies will pay commissions simply for sending customers who apply for insurance quotes. Affiliates receive a hyperlink, just as in the pay per sale model, but get paid if a customer signs up for a free estimate. The commission is smaller than for the pay per sale model, but pay per lead can be quite profitable just the same.

There are other methods of earning money in online marketing, but the methods listed above are the best-known. All three techniques are good, but each one is suited to various kinds of business. The savvy marketer will try to take advantage of all three methods to maximize earnings potential.