I have received a few responses to one of my previous posts, asking to further explain Affiliate Marketing. So, I'll provide more detail in this post, that hopefully will provide the information some were looking for....

My previous post, (The Early Learning Phase of Affiliate Marketing) I posted a picture in which I'll use again in this post (below), this time however, I'll expand a bit more.

Let’s look at the steps of the How Affiliate Marketing Works graphic.

Affiliate Program Sign up
This first step/piece sounds simple enough, however it really is the last step in this multi-step process, since you should first decide what you want to sell or promote. You should do some keyword research to determine the level of demand and the level of traffic your keywords can generate.

Experience and knowledge of what keywords are is a plus including how they work; where they are in the buy cycle and how you can use them to your advantage given the competition there is for them. You can easily find this on the internet. Or, if you are taking some training, then this piece should be included.

You are going to want to learn how to register a domain name. You are also going to want to learn how to set up a web site to go along with that domain name. For that, I again refer to you to my previous post (Registering a Domain Name) You are going to want to create articles and content to put on that website in a way that optimizes what the search engines are looking for.

Does this make sense?

This is a real business that takes time and effort to be successful.
Having covered all that, lets move on, remember that we are still at step one.

The Affiliate Link
When you get through all the steps in phase 1 and succeed in getting approved, then you get your product(s) or service affiliate link(s) from an affiliate program.

The affiliate link is a piece of code that has an identifier on it that is specific to your account with the merchant.  It tells the merchant that the traffic it is receiving with that code on it is traffic you have sent to the merchant.  If that traffic buys you get a commission. So basically, it links back to you.
So, you put that affiliate link(s) on your website.  Your link(s) can take different forms, like a visual banner display that a visitor can click on. Or it can be a product image that can be clicked on. Or it can be a text link in the copy of your site content in an article or in the product description.
Whatever the form, it is a link that sends your visitor to a merchant’s site and with some luck or good pre-selling you get that visitor to buy the product or service.

There is a whole body of information about masking or cloaking your affiliate link to prevent bad guys from stealing your link but that is something for another time.

Customer Visits Your Website
The next step is pretty straight forward.  You set up you website, get traffic and visitors are coming to your site. There are various ways to get traffic, and for that I refer you to my previous post (Generating Traffic).

Customer Clicks Your Link(s)
You have a visitor arrive at your site. He/she reads what you have to offer and clicks on the banner, text link, product image and is sent to the merchant site.  Bravo! You got a click.

The Cookie
Some Affiliate Links include a piece of code and when your Customer clicks on your link(s) it, it puts the code on his/her computer with your identifier on it.  It is called a cookie, which is very common. It tells the merchant who belongs to the link and who should get a commission. It also tells the merchant that the cookie is good for 30-45-60 days so that if that visitor doesn’t buy right away you still have a shot at getting a commission.

Your Visitor Buys on Merchant’s Site

You luck out and the visitor buys a product or service and your cookie is still on his/her computer.

Merchant Checks Cookie
When someone buys something from the merchant and the transaction goes through and is confirmed, that merchant looks for an affiliate link and/or a cookie to find out who referred the sale.

Merchant Confirms Affiliate Link Identifier or Cookie
When the merchant confirms your link identifier or finds the cookie and ties it to the confirmed sale, that sale generates a commission for you the affiliate.  The amount is determined in the affiliate agreement which you have read and are familiar with.

Commission Report
A record of all your sales and commissions is filed in a report kept by the merchant in your affiliate account.

Payment Period
At the end of the payment period specified in the affiliate agreement, you will receive a payment by check or direct deposit or by whatever means agreed to in the affiliate agreement.  This payment reflects all the commissions generated for that period of time, usually on a monthly basis.

Conclusion:

The Affiliate Marketing process takes time to understand.
As was mentioned earlier, the research and set up of an affiliate relationship takes time and effort. You should learn about keywords, domain names, web site set up and design and content creation.

Take Your Time
So take your time and learn to take in information in small digestible pieces. Just give yourself plenty of time and plenty of slack in learning how to do affiliate marketing online.

Hopefully, this helps to provide the additional detail to those who asked, and for anyone else who needed it.