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The concept of affiliate marketing had only been around for a few years, but affiliate marketing is already the single fastest growth industry on the Internet. The reason is simple, it is the most cost-effective way to generate online sales. How? Read on to find out.

Affiliate marketing is a way of promoting an online business where the affiliate advertises for the business, and gets a commission for every customer they bring in. Compensation may be made based on a certain value for each visit (Pay per click), registrant (Pay per lead), or a commission for each customer or sale (Pay per Sale), or any combination.

It is a great situation for marketers because their affiliates generate a lot of business, but it is a pay for performance model (no payment is due to an affiliate until results are realized). There are also several reasons why it good for the affiliate: they do not have to develop their own products, they do not have to spend large amounts to manufacture and store inventory, they do not have to take and process a orders, and almost all of these programs are free to join.

Some businesses sites run their own affiliate programs while others use third party services to track traffic or sales that are referred from affiliates. While running their own affiliate program is not impossible, it does require some time and effort, so many companies prefer to use outsourced providers. Most of these services provide tracking, reporting, and affiliate recruiting. Some offer additional services such as cutting checks, sending out end-of-year tax forms, and responding to webmaster queries.

Although it has the potential to become a lucrative work-from-home business for affiliates, getting into the field can be a little bit overwhelming. With thousands of programs out there, all of them boasting "the best/most lucrative way to make money" it is hard to know where to start. According to Wikipedia, the most active sectors for affiliate marketing right now are the adult, gambling and retail sectors. The three fastest growing sectors in affiliate marketing are the mobile phone, finance and travel. Entertainment (especially gaming) and internet-related services (particularly broadband) sectors are also growing very rapidly. If one does their research about the marketers and is willing to put some effort into the advertising, affiliate marking may have what is takes to be considered a legitimate work from home business.