I was reading up on some stuff which may help me setup a start up. Basically I came across "affiliate tracking", read it, but was still not quite sure what exactly does it do.
On websites they often sell / link to other peoples websites or products.
For example if I run a blog about Marathon Running I may link to DVD's about running, a shoe store, clothing lines, maybe an iPhone app. For all of those services I'm linking too I want to get paid a commission on those referrals.
So all those other companies (dvd, shoe store, clothing store) would need an affiliate tracking solution to know what websites referred them traffic, and from that traffic what turned into sales, and from those sales how much of a % are they going to have to pay back to the original website that referred them.
Affiliate marketing is a popular way of making money on the internet.
And lots of the top blogs promote products, or services and get paid a commission on any sales made from people that come from their site. So the affiliate tracking software helps with that entire process.
Hope that helps!
Commission Junction is a popular site to find affiliates to link to, to make some money.
Affiliates can take many shapes but the underlying principal is getting paid for driving traffic or sales from the affiliate to the principal.
If I have a website selling product X for $20 and you have a website which talks about products in my catagory I might offer you $3 per "qualified lead" you send across to me.
This is usually far more effective than simply advertising in random locations or even targeted locations because it is someone else ("a semi-trused source") qualifying you to the end customer.
The problem is you need to track and manage who should get paid what given your specific set of rules.