i have noticed recently that a lot of providers are reselling at a discount rate from other companies, is this a normal thing? It seems like a great idea but i didnt know it was a standard thing to resell the servers...
Yes it's pretty normal. I would say a majority of folks are resellers of one company or another.
The downside to this is the end user has to wade through two levels of support if there is a problem and for the reseller the profit margins are normally very small doing it this way.. To be honest I'm not sure whay anyone bothers for $20-$30 per month..
So a reseller just will just advertise the server on their hosting site and then when it comes to somebody ordering, they bill the customer and then pay the server company and provide their own support?
Seems ok but as you say, being the middle man may be a bit confusing.
I cannot say how most do it but thats about right.
Don't get me wrong there are some that do quite well at it but it's like anything else you need to have a large commit to generate any kind of profit.
The problems come in when your customer needs something that you aren't able to provide and have to go to the DC for it. We have all heard the "Slow support" stories at different DC's.. This compounds the problems because your client looks at you as the person not resolving their issue in a timely manner when that is not really the case.. So it can and does damage your rep. on occasion if you do not seek the right providers..