Why do hosts allow reseller accounts?

I understand there are many hosts who are just selling space on a bigger host’s reseller program. They are basically middlemen. Like this:

Big Host sells a reseller account to Mr. A.

Mr. A. makes a website for "Mr. A’s hosting" and get some clients. He is their host, but Big Host is his host. So technically his clients are using Big Host’s servers, it’s just Mr. A is a middleman.

Why do the bigger hosts allow this?

I understand they get paid by the reseller, but if you were a big host and didn’t allow resellers, then anyone who wanted to host would have to deal directly with you, and you’d get more business and be able to charge more.

I’m sure I’m missing something here.

Do big hosts just not want to mess around with small clients who only need 1gb of space and they’d rather just sell bigger chunks to middlemen who can sell smaller parts of those bigger chunks to small clients?

Depends on the reason but here are the two most common
A) the middle man provides services the hosting company doesn’t want to provide.
B) It also allows us to sell our infrastructure but not our support staff so it can be sold at a discounted rate.

Same reason Heinz doesn’t only sell ketchup directly to the public at it’s factory. Or pretty much any other product

But isn’t all Heinz ketchup labeled as Heinz ketchup, or can you buy JesterFX brand ketchup that is actually rebadged Heinz?

Like you can go to Hostgator and pay $20/mo for reseller hosting. The resellers are going to charge more than $20/mo for their clients, so that amount of space and bandwidth that Hostgator sold for $20 is actually worth more than $20.

Why doesn’t Hostgator just cut out the middle man entirely? The end clients pay less and Hostgator makes more.

Like you can go to Hostgator and pay $20/mo for reseller hosting. The resellers are going to charge more than $20/mo for their clients, so that amount of space and bandwidth that Hostgator sold for $20 is actually worth more than $20.

Why doesn’t Hostgator just cut out the middle man entirely? The end clients pay less and Hostgator makes more.

Did you know that hostgator is just a reseller from some one else? is your mind blown now?

risk@Ultron ~ $ ping hostgator.com -q -c1
PING hostgator.com (50.97.99.189) 56(84) bytes of data.

--- hostgator.com ping statistics ---
1 packets transmitted, 1 received, 0% packet loss, time 0ms
rtt min/avg/max/mdev = 12.180/12.180/12.180/0.000 ms
risk@Ultron ~ $ grep OrgName <(whois 50.97.99.189)
OrgName:        SoftLayer Technologies Inc.
risk@Ultron ~ $

kinda… This is how it works.

Softlayer.
I am a company, I offer servers for sale and colo-space but I don’t really advertise real hard to smaller mom and pop shops, we accept their business but don’t "cater" to them.

HostGator
I am a company, I offer servers and "web hosting plans" and cater to small mom and pop shops. If you choose a web hosting plan we will "host" a website for you, meaning create a account on an cPanel box and give you a slice of a server. If you choose a dedicated server, ill sell you a server from Softlayer but you as a dumb end user have no idea and think its from us. When you have a "OS" problem HostGator’s team of crack retards will attempt to fix it, if you have hardware problem Softlayers team of dumb hands will fix the server for me (as they are really owned by SoftLayer) and Ill tell you its all better.

Softlayer has no real desire to manage your 1 server as a mom and pop shop, if you where say… DrawSomthing and needs 200+ servers to keep your game up and running you would have a sales nerd from SoftLayer working with you to get shit rapid provisioned and possibly even have managed services (OS Monitoring/Setup and basic Breakfix administration) obviously all at a cost.

Full disclosure I worked for the company that Softlayer absorbed that previously hosted HostGators shit and I fixed many a OS/Hardware issue for those derps in my early days.

kinda… This is how it works.

Softlayer.
I am a company, I offer servers for sale and colo-space but I don’t really advertise real hard to smaller mom and pop shops, we accept their business but don’t "cater" to them.

HostGator
I am a company, I offer servers and "web hosting plans" and cater to small mom and pop shops. If you choose a web hosting plan we will "host" a website for you, meaning create a account on an cPanel box and give you a slice of a server. If you choose a dedicated server, ill sell you a server from Softlayer but you as a dumb end user have no idea and think its from us. When you have a "OS" problem HostGator’s team of crack retards will attempt to fix it, if you have hardware problem Softlayers team of dumb hands will fix the server for me (as they are really owned by SoftLayer) and Ill tell you its all better.

Softlayer has no real desire to manage your 1 server as a mom and pop shop, if you where say… DrawSomthing and needs 200+ servers to keep your game up and running you would have a sales nerd from SoftLayer working with you to get shit rapid provisioned and possibly even have managed services (OS Monitoring/Setup and basic Breakfix administration) obviously all at a cost.

That reply makes sense. Thanks.

Full disclosure I worked for the company that Softlayer absorbed that previously hosted HostGators shit and I fixed many a OS/Hardware issue for those derps in my early days.

That explains why you said "us" in your first reply.

I do the managed services part now for a living…. That’s where they money is.

I have a reseller account for the websites I create because i bill clients for hosting services. i have a very watered down version of cpanel i give them access to so they can’t really fuck shit up.

having their own "hosting account" allows me to offer them a few more services and justify the cost i bill them