How can I get this working? Am I required to purchase sites from you so that my clients can buy sites from me?

I would like to setup the component so that my clients can setup their own sites by purchasing them without my help.

Buddy

If you want to propose a service to create website from the front-end, this is effectivelly possible.
See the tutorial video 13 that show how to propose a such free service.
www.jms2win.com/en/tutorial#jms12x-13

If you want to sale the website creation to your customer, this is also possible.
In this case, you will have to enable the "billable website" creation when you define the menu item with "Multi Sites".
You will also need to buy "website quota" in the "settings" menu.

If you want to process automatically the ordering until the payment, we propose the "bridge for VirtueMart" that is a plugin that works between JMS Multisites and VirtueMart for the ordering and payment processing.

So you can propose an automatic system that will create slave site into a subdirectory of one of your website.
If you want to propose subdomain or domain for your customer, you will have to develop an additional interface to update your HTTP Server (ie. cPanel) to add automatically the subdomain or domains. When working in a subdirectory, there is nothing to update in the HTTP Server.

Why do I need to buy a website quota? Seems like you're trying to make money off of my business when I already paid for the component. I don't want you in my business.

We chosen to deliver Jms Multisites at a very low price because most of the customers are using for themselve and not to resale the service to their customers.
So we decided to request an additional fees (website quota) only to customers who are using Jms Multi Sites to resale the website creation and therefore contribute to the development of Jms Multi Sites.