Skip to content

What Is Affiliate Marketing And How Does It Work?

What Is Affiliate Marketing And How Does It Work?

Think about the last time you saw an ad on a website promoting products for a company. How long has it been since you saw that ad? For most people, it likely hasn’t been very long at all. In fact, in navigating to this article on this page, you’ve probably run into several advertisements across multiple websites.

Many of these ads are affiliate advertisements, in which the website will put up the ad on behalf of a company and refer their visitors to that company’s website. Then, when sales are made because of those referrals, the website with the ad, known as the affiliate, gets a commission of the overall sales total.

This is the basic equation for affiliate marketing and several parties are involved in this process:


As discussed above, affiliates are websites that opt to show affiliate ads to their viewers. Their goal is to refer their own visitors to the advertised website in hopes that the referred visitor makes a purchase. Any purchases made as a result of the referral are tracked and the affiliate is given a pre-determined percentage of the overall sales total as compensation.


So, just who are the affiliate representing in their ads? The answer is online retailers, called merchants, who have affiliate programs available. Merchants often work with affiliates who have websites with content or purposes that are cohesive to the type of products they sell. For example, a merchant who sells accessories for women will likely be working with affiliates who have websites that focus on fashion, design, or style.

Merchants are responsible for creating ads for their affiliates, regularly communicating with affiliates, and keeping their program up-to-date and well run.

Affiliate Marketing Networks

Affiliates and merchants are the two most visible participants in affiliate marketing, but just how does an affiliate ad work? When referrals are made from an affiliate’s site to a merchant’s online store, that referral is tracked using an affiliate link and advanced tracking software built by an affiliate marketing network. Outside of recording if a purchase was made and how much the purchase amount was for, no other information is tracked.

Anyone with a quality website can apply to become an affiliate in an affiliate marketing network and begin to participate in the many merchant affiliate programs that are available.

Merchants can also sign up with these affiliate marketing networks to establish and make available an affiliate program for their online store.  It’s also through these networks where merchants create and make available their ads for their affiliates to put on their websites. and AvantLink Canada are prominent affiliate marketing networks that focus exclusively on high-quality affiliates and established merchants with a large online catalog of products. If you would like to learn more about affiliate marketing solutions for your business, fill out an application here and watch the video below for a quick visual summary on how affiliate marketing works.

Link to video for embed code:

Back To Top