Exhibit 1: hostgator.com/resellers.shtml
In the right column you can see it says, "FREE Enom Domain Reseller." Below that, "You will be able to sell domains through a domain reseller account with our discounted pricing!"
You actually get a "retail" account at enomcentral (the retail version of enom), which does not appear to be intended for reselling and is in fact completely different from the reseller accounts offered by enom. You do get discounted prices, since the domains are $9.45 instead of the normal $29.95 at enomcentral, but $29.95 is a ridiculous price anyway when godaddy charges 10 dollars for a domain.
Exhibit 2: hostgator.com/enomreseller.shtml
Note: "Your price on domains will be $9.45 a year. If you were open an enom account on your own they would charge you a $500 startup fee, and your rate for domains would be $9.45 a year."
This is very misleading, because it seems to imply that you are getting the same type of account that you would at enom for $500 a year, while the account that hostgator actually offers is NOT a reseller account (in fact it isn't even an enom account), and does not include most of the features in the $500 enom reseller account that they refer to.
Please call me out on this if I'm wrong; I hope I am because I would rather not have a reason to cancel my hostgator account already.

Have you contacted them about this?
When you create a sub-reseller account in Enom, it is set to a retail account by default. They may well have forgotten to switch it to a reseller account.

Is very misleading, http://www.hostgator.com/enomresellers.shtml
States that you must deposit $100 to be upgraded to a reseller.

Is very misleading, http://www.hostgator.com/enomresellers.shtml
States that you must deposit $100 to be upgraded to a reseller.
But thats for making purchase too.
Thats marketing.

The $100 is actually set by Enom and is applicable to all reseller accounts, not just Hostgator.

Yeah I think this really isn't as bad as I thought. They might have mentioned the deposit in a place that would be easier to find, but yeah that's just marketing...

They're doing you a favour :)
By having a retail account, you don't have to deposit the $100 to get started. Once they've switched it to a reseller account, it can't be switched back to a retail account.

Sad thing is that some people will fall for this

However the OP is right, it states that you get a eNom domain name reseller account if you purchase a reseller hosting plan. So if he desires to fill that account today or later its his own problem, as long as you advertise it as "domain reseller account" then you have to provide your customers with "domain reseller account" and not "domain retail account". Unless it is also specified in their site that to get upgraded to reseller you have to first make that deposit. Its unclear really.

well, When i signed up I got the reselelr account, not a retail account. That was 3 years ago so mabe they changed how they set it up at first?

Funny. This is the second hostgator advertising scam thread in only a few days! :)
There are many other reseller hosts that offer domain reseller accounts with better wholesale pricing than $9.45 and with no fees whatsoever. Do your homework and you should be able to find something that offers a better deal!

What scam? Almost all hosts offer enom reseller accounts - some have lower prices.
It does not mean anything if HG has a bit higher price.

As Dan_EZPZ said, when you create a eNom account it automatically defaults to RETAIL. I am assuming whoever setup your reseller account did not remember to switch it to RESELLER.

I see some offer 6.95$ domain reseller account. Yeah, this is your homework.

I see some offer 6.95$ domain reseller account. Yeah, this is your homework.
Its not really $6.95 after the fees :P

I came across the owner of a consulting firm a couple of months back. He mentioned that he's adding about $2k per month to his bottom line with HostGator. Does anyone here have direct experience with them?

Host Gator is a major reseller, I have not has an account with them. I find Host GATOR has changed there pricing in an very dis-honest/misleading way.
There Shared Plans are unlimited and there reseller plans start at $24.95.

I have a hosting account with Host Gator and while they have provided me with the best service (seriously 100% better than siteground --my previous host), I find that I am leery about the unlimited everything marketing ploy. Because it states in their TOS that if one account uses 25% of their resources (disk space, bandwidth, etc.), then it is grounds to suspend the account. Can someone tell me what 25% of unlimited is?? Because to me it is a big unknown.
Not to mention the whole inodes (sp?) issue.
Oh and if you are looking for a reseller host that provides an actual FREE domain reseller account, sign up with Readywire! I've had nothing but a good experience with them so far! I even got a Christmas card in the mail from them (yeah, i'm sappy...but still touched.)

and there reseller plans start at $24.95. No change there. They've always started at $25. And the shared hosting change is for all purposes, just cosmetic. 600GB and 6000GB for under $10, you could just as well call it unlimited, for the real limit was not given by those figures anyway.
states in their TOS that if one account uses 25% of their resources (disk space, bandwidth, etc.), then it is grounds to suspend the account. The 25% refers to CPU usage and memory usage, not disk and bandwidth.

But still...how do you know how much you are using?

The vast majority of hosts have similar policies (the numbers may vary), there's nothing wrong with that.
For their shared hosting customers HG has added CPU and a memory usage meters in the control panel, as well as a meter of concurrent processes. It can help one see the account's momentary usage.

Host Gator is a major reseller, I have not has an account with them. I find Host GATOR has changed there pricing in an very dis-honest/misleading way.
There Shared Plans are unlimited and there reseller plans start at $24.95.
What is misleading about this?