If you have your own product to sell then you may even consider selling it using an affiliate program. There are two ways you can set up your affiliate program.

• Purchase Your Own Affiliate Software
• Use Third Party Service

Purchase Your Own Affiliate Software

You purchase an affiliate software Package and install it in your server. The software will track affiliates and sales. Features you should look for include:
• Sign up affiliates automatically
• Track and display stats for affiliates in real-time
• Work with shopping carts
• Track orders
• Track visitors who come back and buy at a later date and record the affiliate credit for that sale

A big advantage of using your own affiliate software is that you can also use it as ad tracking tools. Just assign a unique affiliate ID to each ad you place, you will be able to find out which ones are working and making money for you.

Another benefit is improved link popularity which is extremely important for search engine ranking today. Since all the affiliate links point directly to your web site if you use your own affiliate software, your link popularity will be much higher.
This however is by far the more complex solution and I would not recommend it to anyone new to affiliate marketing.

 Affiliate Networks

An Affiliate service provider will manage all the details of your revenue sharing operations including affiliate sign-ups, approvals, tracking, reporting, and commission payments.

A huge advantage of using a third party is that it promotes your program for you. Also, they consolidate payouts (payouts from all merchants get lumped together into one large check), making it a favourite for affiliates as they don't have to join hundreds of different programs.

Third party affiliate program providers normally  charge you a percentage of each sale or a set up fee, or both. This is the route I would recommend for anyone wanting to set up an affiliate program themselves for the first time and for anyone wanting to promote affiliate programs.

On the other hand, affiliate links managed by third party will point to that third party's site first then redirected to your site. Search engines normally don't follow the whole path and count it as inbound link to your site. Affiliate program managed by third party won't increase your link popularity.

Popular Third Party Affiliate Program Providers

ClickBank who will also process credit card payment for you. If you are selling downloadable products, ClickBank can be a good choice to set up a simple affiliate program quickly, easily and very cheaply. It has about 100,000 affiliates.

Commission Junction: Launched in November, 1998. The largest affiliate management service.

 ClixGalore -One of the larger affiliate networks with over 4500 affiliate programs.

RegNow: Like ClickBank, RegNow handles credit card processing and affiliates for you. The reason they are not as well-known as ClickBank is their much smaller affiliate base.

LinkShare: Another large network. It costs several thousand dollars to set up. LinkShare has attracted some big names, including Dell. You benefit from the publicity it generates. 

Related Articles and Resources:

• How Affiliate Programs Work

• Joining Affiliate programs