The user is now free to post the banner on their web site and wait for surfers to visit Amazon and buy something. Not until then does the affiliate make money. It seems obvious why companies would want to set up affiliate programs. The sheer size of the web makes it impossible for them to communicate effectively with all potential customers. That may be true, but the real genius of an affiliate program is its ability to share risk.
Advertising is risky.
You never really know what is going to work until you try. Big advertising campaigns are even riskier, since more is at stake. Spending millions on advertising in the wrong place, with the wrong message could spell disaster for a company. Affiliate programs effectively shift that risk burden onto the little guy. With affiliate programs, such as Amazon's, there are countless small businesses with banner ads and links on their sites.