Affiliate Management is considered to be most cost effective marketing practices, it is becoming so much popular that Google has comeup with affiliation program. There are three affiliate models and many popular services offering affiliate management systems.

1. Owning and Hosting our own affiliate program
Many ecommerce software / application has an affiliate component built in to faciliate affiliate marketing for example oscommerce, zendcart, vpasp and many more.  Having own affiliate program gives positive and negative edge over not to having, will discuss at the end.

2. Renting or Buying third party affiliation system.
Affiliate program in eCommerce application are not full featured so it is advisable to get rented / buy third party applicaton having lots of features to manage 100s of affiliates and to view various reports inorder to manage effectively

3. Signup Affiliation program
There are many affiliation program where you dont have to bother about installing application or hosting it, they simply charge a signup fees, a monthly fees and a services charges and commission to affiliate. This model is widely used by many online businesses and they get very good sales out of it, there are even ebusineses who are getting 1/3 of their sales through affiliate marketing

Lets compare three of them to identify which one is better.

Option 1 and 2 are ok as it is cheap and is in full control but option 3 is the best as you do not have to bother about software, hardware and even affiliates. The company provide you with 1000s of affiliate force to sell your product online.

But it depends on business to business about what are their requirements and how much they can afford to pay as commission, setup and fees to the affiliate program.