We will start off with a product. There are millions of products out there that people want to sell to you. It can be books, electronic gadget, t-shirt or even cars. Let us use books as our product for this discussion. Amazon.com is a well known business entity who sells books online. Therefore, Amazon.com is a merchant.

I think customer definition is straight forward here. How about network and affiliate?

In relation to network, we define it as affiliate network. Affiliate network offers connection between merchant and affiliate. Such offers can be in form advertising assistance for the merchant to reach out the affiliates. It would be business opportunities for affiliates to get product and/or services from the merchant and reach out the customers.

Some examples of affiliate network are google.com/adsense and clickback.com.

There will be two outcomes from affiliates' perspective:

• Customer will be buying books through the affiliate and commission will be paid accordingly. 
• Another outcome is the customer will convert themselves into affiliate.

All the information above, suggesting that affiliate is people like us. Yes, it is people like us.

I am also building a simple model to articulate the groups in affiliate marketing as you can see it below:


The above model shows how product and/or services reaches customer.  You can see now how each groups are connected. You may realize that I did not touch in details on the commission and pay-out. We will reach to that level later. We will get our understanding right first before talking about pay out.

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