Some are simply pyramid schemes in disguise. Residual commissions refer to programs that provide affiliates the ability to earn an income, month after month, for referring a sale to a merchant. They are usually those that offer some type of service for which the customer is charged an ongoing subscription fee. Examples include web hosting, tele-communications, and ecommerce solutions. They offer an effective benefit to affiliates since the affiliate can earn income for an extended period, perhaps even years, from a single sale.
Tracking refers to the way that a program tracks referred sales, leads or clicks.
Some programs also use cookies for tracking. Cookies are small files stored on the visitor's computer which record information that is of interest to the merchant site. Most programs use either unique URLs or affiliate ID numbers in conjunction with cookies to track properly. And for this service, the network takes a percentage of the overall revenues. Similar to banner networks, an increasing number of companies have sprouted up to help merchants facilitate their affiliate programs.