Wholesaling - seems a bit scammy

[David Fitch]

Am I missing something? 

This entire concept of wholesaling is a bit scammy to me; I'm frankly amazed that it seems to be as popular as it is. You're entering into a purchase agreement with someone, with no real intent to purchase. What happens if you can't find someone to pay more for the same contract that you signed? Do you just back out? Does the seller know when you're signing as a wholesaler, or do you just take one of the standard "outs" that everyone has in the early stages of a real-estate contract, with no advance notice provided to the seller?

Do I misunderstand the concept entirely?

Discuss.