Affiliate Marketing is the technique of using your web site to refer business to another's web site, and in return earning a commission on any business generated. To do this you need to become an "affiliate" of the doing-business web site, and they assign you an affiliate ID number, provide you the linking code so that when your site's visitor's click on a link to go to the other site their purchases can be attributed to you.
Selecting the right affiliate programs is important because if you have the wrong product mix, or the wrong presentation for your mix of visitors, they will not buy. It's very much like running a store, that way, except you don't actually carry any of the inventory.
Here are some affiliate program resources:
Team up with other Web site to increase traffic to your site.