As suggested by the name, a reseller web hosting account provides a platform you can use to resell web hosting. This is not the only thing a reseller account us useful for though.

Typically you pay a fixed monthly fee for the account. You can resell web hosting account to your customers at any price you choose. Any qualified reseller web hosting service will provide an admin panel where you can manage your hosting accounts.

When you get a new client, you will need to set up their account through your admin panel. You will also be able select how much disk space or bandwidth is available to each of your clients. 

Instead of using a reseller account to sell accounts it can also be very useful for webmasters running several web sites. With a reseller hosting account you typically get more control over each account compared to a shared account. It is more comfortable being able to set up separate accounts in WHM (web host manager) for each site, than having to make tricks in order to host multiple sites on the same account. Another alternative is a shared hosting account with unlimited domains, although there are some drawbacks you should be aware of. You can read more about those here.

A reseller account could be a suitable choice for a small-business webmaster who's planning several sites, but still isn't ready for the bigger and more expensive VPS or dedicated server solutions.