Affiliate marketing is, in effect, a joint venture or partnership between businesses with products and services to sell (merchants) and businesses who want to sell products or services (affiliates) without the expense and hassles of carrying stock, servicing customers, product delivery, etc.

Affiliate programs, sometimes also called associate programs, reseller programs or partnership programs, are set up by merchants who then recruit affiliates who in turn will promote the merchant through web sites and email campaigns.

Both the merchants and the affiliates are involved in affiliate marketing; merchants on the supply side, affiliates on the sales and marketing side.

Affiliate marketing benefits both sides, the merchant doesn't have to employ a sales force and pay them even if they do not perform, the affiliate doesn't have to carry stock or service the clients.