Your summary is about right, buy services and resell them, many offer free hosting, supported by ads, with the hope that their users don't maximise the bandwidth, but they normally turn paid as their membership grows
Well, here's the thing. Being a reseller, there is A LOT more involved than just saying you are a reseller. You have to provide customer support to your clients, you can't just expect them to buy hosting services from you and then make the data center that is actually providing you the hosting do all the work. You will be responsible for each one of your client's sites and if something happens, the sites go down you have to be in there to manage and maintain it. I'm not entirely sure about what the costs will be for you as a reseller, but you will have to map out a pay structure plan that fits what the hosting company is going to be charging you and then you of course have to find a way to profit from it as well. I think personally if you don't have the time or the drive to want to handle customer support, and maintaining people's servers, then the best way to go is to signup as an affiliate for the hosting company you prefer and just promote the service itself. One of the best ways to promote a service is to actual be a part of it yourself, after all, if you can provide a real testimonial yourself and your audience knows that you in fact are using them they will be more apt to joining the service you recommend as well.