If you've been around internet marketing for any period of time then you will have undoubtedly come across a LOT of sales funnels... Quite simply, a sales funnel is a series of offers that are presented to the prospect/customer and tend to increase in both price and value. The idea is that as someone goes through the sales funnel they become more and more engaged and spend more and more money.
A typical sales funnel works like this... At the 'front-end' is a free product to capture people's interest. In order to grab the free product people have to sign-up and hand over their email address - and in turn they are added to an email list/database of prospects. After the person is added to the list, they can then be sent other related offers that they might be interested in. Immediately after signing up for the free product the prospect will typically be presented with a low priced offer (called an 'upsell' or 'one time offer')