The concept of affiliate marketing on the Internet was conceived of, put into practice and patented by William J. Tobin, the founder of PC Flowers & Gifts. Launched on the Prodigy Network in 1989, PC Flowers & Gifts remained on the service until 1996. By 1993, PC Flowers & Gifts generated sales in excess of $6 million per year on the Prodigy service. In 1998, PC Flowers and Gifts developed the business model of paying a commission on sales to the Prodigy Network.
The only difference with the offline middleman and affiliate business program is that the online affiliate does not need to get hold of the actual product to earn revenue. He doesn’t need to shell out money to buy the product that he has to sell. All he has to do is create a site that markets the products of the producer. Every time he makes a sale, the producer will take over to send the actual products, receive payments and extend customer support, when necessary. A special web-based script records this process and thus the affiliate is paid for every successful sale he makes.