Affiliate Marketing In Layman's Terms

What is affiliate marketing? I will give you my understanding in layman's terms. Affiliate marketing is basically a transaction involving a "middleman", it's that simple! It's a win-win for all parties involved, let me rephrase that, it's supposed to be a win-win.Here is an example: you see a product or service on a website and click the ad and go to that product or service providers website and make a purchase. Then the website where you clicked the ad would earn a commission for referring you.
The concept of affiliate marketing is really pretty simple to understand. Now applying all the nuances and being successful is another whole ball of wax that I will not go into here. There are rules and regulations that you need to adhere too as well. I decided to post this after a friend asked me what affiliate marketing is about and I wanted to put it in very simple terms.