A reseller is a company or individual (merchant) that purchases goods or services with the intention of selling them rather than consuming or using them. This is usually done for profit (but could be resold at a loss). One example can be found in the industry of telecommunications, where companies buy excess amounts of transmission capacity or call time from other carriers and resell it to smaller carriers.
Yes, if you want to get into the web hosting business without starting an entire operation from scratch, or if you're a web designer who wants to host your clients' separate control panels without ponying up money for potentially expensive dedicated hosting or VPS hosting. That said, you should know something about how web hosting works. You need to be ready for the inevitable problems that will arise, and you'll sometimes need to act as the messenger between your clients and your web hosting provider.