Affiliate Marketing is classified into many types. All kinds fall under two basic categories. These are pay/click and pay/performance.
 
Pay/Click

It is also called PPC. It is considered to be the easiest and most popular affiliate marketing method. This is the greatest thing for small websites.  With this method the affiliate marketer places the banners and text ads of merchants on his website. The affiliate is paid for every click made on these banners. When any visitor clicks on these banners and visits the merchant website, the affiliate gets credited. It is not essential that the visitor makes a purchase. However, the typical earning for a single click is very small, usually less than one dollar.

Pay/Performance

Pay/performance affiliate marketing, also called PPC, is extremely famous among big affiliates and all types of merchants. In this method the affiliate gets credited only when any visitor from their affiliate id performs the required action. This required action may be a purchase or becoming a member of a merchant website. This method is very good for the merchants because they will only pay when they are paid. For affiliates, it is attractive because they are getting a good share in the sales of merchant products. The usual share is about 15-20% of sale.

If we classify the affiliate marketing on the basis of depth, then it can be divided into 3 classes. These are single-, two-tier and multi-tier programs. Another type is the one in which an affiliate marketer is paid for every sale that is made by a person referred by him. This is called residual income affiliate marketing. Let us study these types in detail.
 
Affiliate Marketing: 1-Tier, 2-Tier & Multi-Tier

In an affiliate program of single-tier nature, the affiliates get the commission, only, for the visitor’s traffic or sales to the merchant’s website. Pay/performance and pay/click fall under this category.

Talking about Two-tier marketing, the affiliate gets the commission for every action done by the visitors referred by him. Plus he will get the profit whenever some other affiliate, referred by him, gets the commission. So in this way affiliate is earning directly as well as indirectly.

The multi-tier marketing is the same as two-tier marketing. But in this type, the affiliates get the commission for the sales made by their affiliated affiliates in multiple tiers. The depth of this type may be unlimited.

Residual Income Marketing

In this type of marketing, affiliates get the commission for every sale that his referred person makes on the merchant website. The only requirement is that on the first time visit, the person should come from the affiliate link of the affiliate. Next time if the same person visits the merchant website, even without using the affiliate link, the affiliate will be paid for every sale made by the visitor. The question that arises is how the merchant will know the affiliate id. The answer is very simple. On the first visit of the person from the affiliate website, a cookie is created on the computer of the visitor. This cookie stores the affiliate id of the affiliate. This cookie usually expires after 3 months. In some cases it may be longer.  Whenever a visitor visits the merchant website, the visitor’s computer is checked for the existence of any previously created cookie. If the cookie is found, the affiliate id is retrieved from it and the affiliate gets credited for any purchase made by the visitor.

Affiliate marketing is very beneficial both for merchants and affiliate marketers. It is a popular method to earn profits from the websites and also helps the merchants to increase their sales.
It is the cheapest business on the internet that can make you the highest profit.

Lets us discuss some important benefits of affiliate marketing to affiliate marketers and merchants.

Benefits to affiliate marketer

1. No Need to create a product!

One important benefit of affiliate marketing is that you are not required create or produce any products.  It is the duty of merchants to create the products. So you are only required to select the products to sell, get the affiliate links and start your business in ten minutes. You can focus on selling the product as you don’t need to do anything with the production or delivery of the products.

2. You Can Start with No Money, or with as little as $100

Another important feature of affiliate marketing is that you can start your business with little or no out of pocket expense. This is the lowest possible investment in today’s world to start a business which has a great scope in the market. If you simply don’t have any money to invest, you can always use free tools to start your business.

3. The Easiest Online Business

It is the easiest online business due to the fact that the merchants do all the hard work like making products, delivering products to consumers, handling money transactions etc. Affiliate marketers are not responsible for any of these tasks. They just need to focus on promoting their affiliate links.
 
4. Make Money While You Sleep

As you have your affiliate links on the website which is available on the internet all the time, you are not required to remain online to keep in touch with your customers. People can visit your site whenever they want and can visit your affiliate links. If they like the product they can easily buy it by just by clicking the given links.
Your only concern will be checking your email to see how many sales you have made from your links.

5. Penetrate Hot Markets Fast!

You can select any hot market at any time to choose the products you wish to sell. If you observe that other marketers are making money with pet care related products for instance, just register with an affiliate program to get some hot pet related products, set up an adwords campaign, and in 10 minutes, you can start to make money!
Benefits to Merchants

1) More Sales in Less Time

The products of different merchants are advertised by many affiliate marketers at the same time. The main website of the merchant is also advertising the products. If the page rank of the merchant website and his affiliate marketers are high, tons of traffic, which are your buyers, will visit the product pages. The website of every affiliate marketer will send the people to merchant websites. This results in more sales in less time.

2) Broader Market to Sell Products

Having new affiliates just expands the market of merchants. Don’t select the affiliates blindly. Do the research to check if the affiliate’s website is related to your business or not. If the affiliate marketer’s website is matching your products theme, then there are more chances of sales. The affiliate’s website will receive hits for the people who need to know about your products and they are more likely to visit your website to make a purchase.

3) Less Efforts Required

Affiliates are doing the hard work of advertising for your products. If your affiliates are doing good work then you don’t need to spend extra time and money for advertising. Just concentrate on improving the quality of your products and launching new products.

Affiliate marketing can provide the easy, fast and reliable money to affiliate marketers. At the same time it gives more sales in less time and money to the merchants.

Having your own website to promote your affiliate products is a good option. But it is not necessary. There are many methods available that can be used to do your affiliate marketing business. The list is long, but the most important methods are email marketing, writing articles to e-groups, joining online discussions etc. Let us discuss some important methods that can be used to promote your affiliate products without having your own website.
Email Marketing

In this method you can promote your affiliate links and you don’t need your own website. People can click on your affiliate links present in your emails and can go directly to the merchant website to purchase the products.

Your email should contain the introduction about the product you are promoting and your affiliate links. Try to make your emails interesting and brief.

Try to expand your contact list. Use as many methods as you can to grab the email addresses of new people. Use online forums, chat forums etc to make new friends. Your email list must contain a few hundred contacts, at least. But don’t spam. Don’t send emails to the people who don’t know about you or who don’t want to receive your emails. Otherwise they will just block your emails and you will lose your contacts. As I said, your emails should be interesting to get the reader’s attention.
Offline Promotion

You can use the offline methods of promotion, like the classified ads, flyers etc. The best choice is the classified ads because its exposure is largest.

Writing free e-books

It is similar to email marketing. But in this method you will write the informative and interesting e-books and will send to the people via their email address. These e-books should be easy to read and helpful for their readers. The topics should be related to your affiliate products so that you can recommend the products in the body of e-books. Alternatively you can add a brief note about your affiliate products and affiliate links for promotion. If the readers like your e-book, they may visit the merchant website and make a purchase.

Writing in Forums

Search for some forums, at least three, that are related to your product and have high page rank. Register on these forums and start some discussion in the forum where maximum people are involved. Just post your questions there or answer some questions of other members. But don’t add any promotion text in the body of your posts. You are allowed to put your signature at the end of your post. Here you can write you name and your affiliate links.

When you become an active member of this forum then you may get some traffic from these forums to your merchant website through your affiliate links. This will ultimately result in more sales of the products you are promoting.

Writing Articles

You can write articles and publish them in the free article directories. You can embed your affiliate links in the text of your articles. If your articles are well formatted, informative and the article directory has large traffic then you can expect some good traffic to your affiliate links. And you know that more traffic on your affiliate links will result in more sales through your affiliate links.

Conclusion

The use of a website to promote your affiliate products is a good idea but it is not necessary. You can use the alternate methods to promote your affiliate products and links. The most popular among these methods are email marketing, writing to forums, article writing and offline promotion like classified ads. The main idea is that instead of promoting your website you will directly promote your affiliate links and people will directly go to the merchant website by clicking your affiliate links to purchase the products. This way you do not have to pay extra for your website creation and maintenance.