By definition, affiliate marketing is a pre-arrangement in which an e-commerce retailer pays a fixed percentage as a commission to an external person/website for conversion from its referrals. Technically, it is an outsourced form of marketing wherein the affiliates are hired and paid to bring customers/conversions. They are paid only when there is a conversion and not when just their efforts drive traffic.
Generating traffic is worth only if it brings conversion. Otherwise, if the visitors don’t equate to more leads or revenue, it’s worthless. For this reason, affiliate marketing is becoming a widespread method of business especially in the retail and e-commerce industry where there is huge business growth from affiliates. Affiliate Marketing is becoming an important part of online marketing culture. It generates sales by advertising on other people’s websites or generating commission by advertising other brands on your site.