An affiliate system is handles the affiliate accounts, it tracks what affiliates have sent to the site, and rewards the affiliates based on a specific Commission for what the referred visitor/user did on the website (purchased, signed up, so on).
Affiliates use the affiliate referral link/URL to promote your website or products. It has the affiliate ID or username appended to the URL so a specific affiliate can be tracked when a visitor or customer visits your website. If the customer successfully completes a conversion (i.e. a sale, or a form submission), a referral will be generated and the affiliate will be awarded a commission.
For a better understanding the main Affiliate system workflow, check the image structure below: