Affiliate programs work by using an online merchant website to pay an affiliate a commission to drive customers to their website to fulfill a purpose that is defined by the merchant. There are different types of programs. Pay-per-sale/Cost-per sale is when an affiliate is paid only when a customer purchases an item. The affiliate is paid either a standard fee or a percentage of the sale. Pay-per-click/Cost-per-click is when the affiliate is paid when a customer clicks on the link of the affiliate merchant even without purchasing an item Pay-per-lead/Cost-per-lead is when the affiliate is paid for directing a customer to the merchant’s site to provide information that serves as a sales lead either for the merchant or another company. The two-tier program is when an affiliate is paid a commission for sales, clicks and/or leads plus commission based on the activities of additional affiliates referred to the merchant’s site. The residual program is when an affiliate is paid whenever a customer referred to the merchant’s site makes a purchase. Pay-per-view is when an affiliate is paid for making a customer view the merchant’s banner link.

Affiliate programs are run either by the merchant website itself or by brokers who serve as intermediaries to recruit affiliates, monitor activities of affiliates and ensure that affiliates are paid what is due them. The broker also makes available other programs that an affiliate can participate in. These brokers take a certain percentage of the affiliate’s earnings as commission for their services. The broker also provides a help-center and a means for the affiliate to check on its progress.