Originally Posted by MechanicWeb-sho
In my experience, after a certain time, once they have enough customers for themselves, master reseller clients move to dedi. Because from a customers perspective, master reseller hosting lacks some benefits that can be crucial when you have a decent client base. Such as root access. If you have 200 sites under your MR, providing support without root access can be time consuming and your clients may not like it. That leaves you to only possible option - a server.
In ithis perspective, if a provider can plan it good enough to maintain a healthy environment on the server, yes, it is profitable.
MR can cause issues for the main server host. Take your example
you have a VPS and have 200 Master Resellers and each of them have 200 resellers who then have 200 shared accounts each.
so now your server has 8,000000 accounts on, but you can only control and oversee 200 ( the 200 Master Resellers) as all the others are not your clients, so you have no control on what is being hosted on the server