Resellers according to the dictionary means to sell again i.e. to sell a product or service to the public or to an end user, especially as an authorized dealer, while making sure that you make a profit on the sale.
Reseller hosting is no different either, a reseller buys a Web hosting package from a hosting company and tries to sell it independently. The profit for the reseller lies in either the discount or in the commission she or he gets from selling an account.
Most web hosting companies try to outsource their services to resellers as it helps them to extend their business reach without the cost of marketing and sales and also helps them to concentrate on the business side of things.
So you can choose your reseller.