affiliate model

Definition

Electronic commerce business model that enables a firm to generate revenue streams on hundreds (even thousands) of items—without carrying inventories, managing orders, processing payments, or handling packaging and shipping. In this arrangement, a website concentrates on a relationship with a very specific group of individuals as its core competence (see core competencies). It develops and continuously upgrades content and services to attract and retain the patronage of this group. Once it has a sizable number of regular visitors, it can generate revenue by carrying ads or links to merchants with products that its visitors seek or are interested in. See also aggregator model.