Heres a short overview of how reseller hosting typically works. For instance, youll buy from the mother web hosting site 1000 MB worth of storage at $25 per month. You can then break this space up into 25 MB each and sell it out for $5 per month. Selling 40 packages to other clients alone means that youll be earning $200 every month. Web hosting sites will even let you oversell the web hosting space so long as you dont exceed the allotted 1000 MB.
The good thing about this is that all the income you make is residual. That is you dont really do much work. All you have to do is to make sure that the client stays subscribed to your reseller hosting space and you keep on raking in the monthly rent. In fact, the only work youll probably be engaged in after setting up the business initially is to contract with advertisers online. Thats what makes it so easy.