I make a good profit from reseller.
I've sold 500mb in 60$ per year where I need to pay 7$ per month for 5000mb.
Isnt that great?

How does this work? I am very confused. Can someone update me on how this works and why one would do it?

Well, i got reseller for my own sites firstly but after some time I find it usefull to sell my resources and earn money because they are not used fully, now I wana have some more reseller accounts with different hosting services, what should be an good idea to have more accounts or just obtain a dedicated server?

There were some free reseller host providers. but the best one went down recently.
AHPlace was good, but no longer available.