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Affiliate Marketing (AM) is basically a Pay for Performance method. Somebody (an affiliate of yours) presents your products, advertisements or just the name/logo of your website on his own website to drive traffic (potential customers) to your store.
There are some submethods of Pay for Performance. Such as Pay per Click, Pay per Visit, Pay per Sale, etc. Most of the merchants prefer Pay per Sale as the main method. If a customer comes to your store from one of your affiliates' website and buys something, you pay some commision to that affiliate in return for his service.
I've tried to explain as simple as possible. If you need further information please refer to www[dot]abestweb[dot]com and www[dot]cj[dot]com.
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