Reseller hosting is the process by which the account holder has the ability to use his own hard disk space and bandwidth from his own hosting account to control multiple domains. He can then sell this hosting along with domains to third-party companies, organizations and other website owners. Essentially, the reseller host owns a large amount of bandwidth and hosting at a wholesale price and is able to resell parts of the same services. In most cases, it becomes profitable after you have a few accounts signed up under you. It is by far, the easiest way to sell hosting; as opposed to start out building servers, control panels, CRM's, etc... Buy eventually, it's quite common for very large resellers to take their clients and break off on to their own.
Sometimes, the reseller may consider getting exclusive use of the hosting instead of reselling the package in chunks for smaller profits. In either case, the reseller only has a pool of bandwidth and disk space to work with that decreases with each new website that is added on the account.
Some reseller hosting companies include value-added services in addition to reseller hosting such as web design or other Internet systems integrations. These particular companies tend to cater to small businesses and companies in the early stages. Someone who controls a reseller account will have the freedom to create his own pricing plans, services, and in some cases even software. The more flexible reseller hosts even grant you the ability to customize your brand and control panel, with some limitations.
To become a reseller you have to have a basic knowledge of the principles that are involved in basic website hosting. All of the aspects involved in web hosting, including nameservers, disk space usage, accumulated web traffic, and common server maintenance will most likely be under your control. As the Web hosting manager, you will be responsible for all of your customers' problems that arise. Since you are 100% responsible for finding customers, you may also have to do some marketing to recruit customers to signup with you. These plans would most likely include enticing bandwidth, pricing, and customer service offerings.
The quality of support should probably by your biggest guide in shopping for a cheap reseller hosting company, as this what separates the success of most hosts today. You may also decide that focusing on one hosting type (Linux, Windows, or others) is best. Asking around in the community may also help. Uptime is still an issue these days. Control panels can be important as well. You also may want to check their customer retention rate, if they give that information out.
Most resellers start out because they have demand. For example, quite often web designers will resell hosting as a way to give their customers everything in one place, and make some profit on the side. Another example might be that you work at a technology/computer/telecommunications company and can cross sell hosting to your existing customer based.
Another important factor is specializing. Many resellers start by targeting a really small niche, and expanding from there. For example, perhaps you just target sites that carry one particular type of product, or represent very small vertical. This may be best if you do not already have demand, and are planning on actively marketing your program.
The most obvious option is for affiliate marketing of hosting accounts. Hosting companies will pay a commission to you if you refer someone to them, and that person signs up. This allows you to focus more on marketing, and less on customer support. Instead of making small commissions every month, you make more money up front (usually a one-time payment). So the trade off is, if you are a good reseller, you might make more in the long run, but with more involvement.
Generally, no, unless you signed something in your contract (rare). In fact, sometimes resellers get so big, they become a hosting company on their own. and sometimes setup their own set of servers (thousands to tens-of-thousands of accounts).
