If a person says he is in the marketing and earn a commission on sales he bring to his company, almost everyone can relate how this reward system works in the traditional 9 to 5 day job.

This traditional commission base reward system was adopted into the internet era by Amazon.com.  Here is an excerpt from wikipedia

Amazon.com (Amazon) launched its associate program in July 1996. Amazon associates could place banner or text links on their site for individual books, or link directly to the Amazon home page.

When visitors clicked from the associate's website through to Amazon and purchased a book, the associate received a commission. Amazon was not the first merchant to offer an affiliate program, but its program was the first to become widely-known and serve as a model for subsequent programs.

In February 2000, Amazon announced that it had been granted a patent on all the essential components of an affiliate program.

The current working model of affiliate marketing is based largely on Amazon's rewarding system for performer.  Since then affiliate marketing has gained wide acceptance in Internet Marketing arena.

Some of the advantages of affiliate marketing for newbies are:
  • As in Amazon’s case they is no need for inventory management and shipment handlings.
  • No need for one to own a product to begin selling, you can start selling right away soon as you understand how it works. Clickbank is one the more popular center where vendors are offering products for affiliates.
  • No need to do after sales services or support, handling of payment, refund and complaint (if any).
  • No need to incurred cost in creating a product. The process of creating a product may be hard for some who lack the necessary skills.
  • Some marketers have suggest the idea of creating pages with sales affiliate links on community sites like squidoo, articles directory, forums and even embedding affiliate links in ebook, free reports and free advertisements sites.

Some of the cons of affiliate marketing are:
  • It need time to really master affiliate selling in the long run. As some old hand put it, it not about selling it about pre-sale.
  • Stiff competition among affiliate marketers for hot products.
  • Inexperience newbies might end up putting in effort into selling products that’s difficult to sell.
  • Most affiliates links can be easily recognize and it may end up being hijack, denied (potential buyers removing the affiliate identity).  You may need extra tools, software or services to disguised your affiliate link.
  • Affiliate marketing would probably be more effective if you’re targeting newbies. Most experience marketers could easily identified an affiliate link when presented to them.
  • Affiliate marketing is not a passive income.  It need continuous effort and time to promote the product you want to sell.  Some of the more common recurrence income may come from signing up on web hosting, auto responder or services that uses online tools like article spinning, content rewriting etc.
  • Some products owners setup affiliate links at their official product site recruiting affiliate marketers to promote their product thus directly competing with people who direct traffic to their site.
  • Often experience affiliate marketers share success secret that work for themselves but not for others.
One should see the cons as challenges that need to be overcome during the learning period before embarking on this business model rather as deterrent.  Nonetheless, affiliate markerting can be a lucrative home base internet business model for those who set the facts right, right from the start.