Affiliate marketing is a form of online advertising that works by only rewarding actual results. An advertiser (or 'merchant') will only pay when a sale or lead is actually made. Affiliates earn their commission by promoting your website. The affiliate is rewarded on a commission basis on the value of each sale or a fixed cost per lead. The affiliate marketing company tracks the purchaser through the ad on the affiliate's site, to the merchant's site, and records the amount of the sale. The affiliate marketing company will invoice the merchant for the amount of the commission and pay it out to the affiliate. Affiliate marketing companies usually have set-up costs, a monthly admin charge, an over-rider on commissions paid and of course you need to budget for the cost of commissions to affiliates. Affiliatewindow and Tradedoubler are probably the best. Ongoing management of your affiliate program is available and includes approving affiliates, confirming commissions, updating ad campaigns etc.