Following are basic definitions of terms you should know to understand the concepts of affiliate marketing.
Affiliate: An independent agent who promotes products and services on behalf of a business in an effort to gain new customers for the business.
Affiliate ID: An unique identifier (typically created by the affiliate at the business's website or sometimes assigned to the affiliate by a business) that indicates which affiliate to pay for new business.
Affiliate link: A string of code that includes the affiliate ID and that, when clicked, redirects to a business's website. This link is used in the affiliate's promotional efforts.
Auto-responder: An email service that automatically responds to requests to receive promotional email. Auto-responders only send email (i.e. they cannot receive email).
Commission: A payment made to the affiliate whose promotional effort results in revenue for a business.
Convert/Conversion: A lead converts to a referral when money changes hands from the lead to the business.
Downline: The people who enter a promotion after you, either directly (through your own effort) or indirectly (through another affiliate's effort).
Lead: A potential customer who has been influenced by the affiliate to consider a business's products and services.
Market: Buy and sell.
Market saturation: The point at which so many people have what's being promoted, it's no longer profitable to continue promoting it.
Marketing list: A list of email addresses of past, current and potential customers.
Matrix: A structure used by some businesses to track the number of sales generated by and the subsequent commissions due to an affiliate.
Opt-in form: A form displayed on a website to collect a visitor's name and email address. When a site visitor submits the form, it grants permission for promotional email to be sent to him or her.
Payment processor: A service, such as Skrill or PayPal, often used by a business to handle commission payment from the business to the affiliate.
Promote: To encourage the purchase of a product or use of a service especially through advertising.
Referral: An affiliate-generated lead that becomes a referral only at the point when the lead pays money to a business for a product or service.
Referral marketing: Promotions where income is generated primarily through
Residual commissions: Additional money paid to the affiliate, generated from subsequent purchases by the affiliate's referrals (i.e. requiring no additional effort by the affiliate).
Sponsor: The person who introduces or who is credited with introducing someone to an affiliate opportunity. Although it might seem to imply more, a "sponsor" (relative to affiliate marketing) does nothing more than make an introduction.
Traffic: Website visitors.
Upline: The people who enter a promotion before you. Your sponsor is your direct upline.
Website: Any commercial or personal page on the Internet with a web address (i.e. a URL). For example, Amazon.com and Facebook.com are commercial (or business) websites; your Facebook timeline and many blogs are personal websites. Verypaid.com is a personal website, because nothing is bought or sold on the site.