How do Affiliate discount links work

gypsydogg

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I have seen people offer discounts on software through using their affiliate link. How does the company make money. For example, I often see get this new software for only $49 use discount code "bhw" or get this product for 50% off using my link. If the manufacturer is giving an affiliate commission and 50% off how do they make money? I ask because I'm trying to set up a deal like this with something I am working on.
 
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