It's always been the easiest way to get into the business itself. Start up with a domain name, a few dollars and you'll find a decent hosting package with enough room to grow. If you're lucky enough and pay a little extra, you'll get a billing system and free end user support. Run it well enough and absolutely no one will know you are a reseller.
In regards to it improving the standard of service, I disagree. It's stalling the market in my opinion, there's a distinct lack of fresh ideas in the industry itself at the reseller level. It's still providing, in my eyes, the simplest form of web hosting, "give em a control panel and they'll handle it."
In recent years there's been a move to virtual servers as they tumbled in price and those brave enough have jumped across and many have thrived in an environment where they control all the aspects. The rest are still hiding under the shadows, still thinking the same, still not in control.
It's still a great tool but businesses who are still stuck under the reseller umbrella and making good money doing it need to get a grip. You're not in control and that doesn't sit easy with me. Your host goes down, your clients go down too. At that stage, who has backups? Wait! You didn't take backups because your provider does. Oops! They've gone bust, lost all your backups and your client's data. What do we do now?
My company does sell reseller packages and we encourage many to use them but we always actively monitor it and once the client has grown large enough, we'll get them thinking about progressing but at all times, we remind them that we are not in charge of their business. They should run it as if we don't exist, taking every precaution along the way.
