Yeah, cPanel VPS is the choice to go, that is if you know how to manage a server. If not, then you better learn fast
or stick with reseller plans, since managed service (good ones) usually cost more than that.
For Wordpress only hosting, usually the profit margin is quite large but it requires a bit more starting investment than $40/mo to be truly competitive in my honest opinion.
First, you'll need to have a high performance server. Wordpress when loaded up with plugins are quite cpu heavy, so if you go with VPS, don't cheap out on the CPU, nor RAM. It's also better to have a separate server for database. You also need a backup solution, and ideally a partnership with a CDN. You also need to figure out how to give each users their own staging areas.
Then, i'd recommend load testing a typical wordpress installation like with 7 days worth of posts with image, a bunch of plugins, etc, with caching on or off in Load Impact, so that you can reasonably measure, in specific terms, how many hits a wordpress site hosted in your platform can get before it got slowed down or crashed. Most managed wordpress providers usually advertise with a specific number in mind. I.e plan A can handle 25k visitors/month, plan B 1 million. Load testing is also good just to make sure that you're not actually false advertising without realizing it yourself.
All these things are needed because in my experience people who are looking for managed wordpress are doing so because they already have an active/busy wordpress sites and they have experienced how limited shared hosting are for those purpose. The only thing they care about is how fast, and how much hits the site can handle, so focus on that.
