Overselling

[El Newbo]

If a reseller oversells a service, who is liable - the reseller or the source?

El

[peter phillips]

Reseller overselling is basically when a host allows a reseller to oversell their resources i.e selling more than the available resources. In this case I think the reseller is solely liable for overselling.

[NS-Icon]

I would agree with Phillips on this too as it simply implies that the host was unable to predict the correct amount of a resources his/her clients would use.

[peter phillips]

I think typically overselling is a bad thing.

[dyna]

I think typically overselling is a bad thing.
I agree, but most reseller doesn't really care, do they?

[ASP-Hosting.ca]

I think typically overselling is a bad thing.

Airlines and phone companies oversell too. Is that a bad thing?

[ayksolutions]

Overselling only becomes a bad thing when its abused and starts to hinder server performance. I honestly think that if you do not oversell, you are losing money. Its like buying a boat that is supposed to fit 20 people. Instead of 20 you get 35 and charge them $5 a piece. You make a decent profit out of the 15 extras. Now, as long as the boat doesn't sink and it does not hinder its performance, there is nothing wrong with it.

[peter phillips]

Airlines and phone companies oversell too. Is that a bad thing?

Hosting business is quite different from those industries in terms of overselling. I am not quite against overselling, most of the people abuse it. If overselling is done wisely and within limitations it might not be considered a bad thing.

[ayksolutions]

Also, I forgot to mention in my first post that you are also helping out people looking for a boat ride, or in our case, some space for their websites. It's a win-win situation.

[dannybedor]

Also, I forgot to mention in my first post that you are also helping out people looking for a boat ride, or in our case, some space for their websites. It's a win-win situation.

IMHO, overselling is still a lie to the clients.
Resellers win clients lose.
What do you think your client will react if you say to him : "Because you only use 25% of your allocated bandwidth resources, then I will sell the left 75% to others. Don't worry, you still have to pay for 100%." :D

[peter phillips]

I agree, its like paying for 100% even if you are not using the 100% alloted. Reselling in hosting business is bad, it generates considerable amount of profit for the resellers so I don't think they care about it.

[ASP-Hosting.ca]

IMHO, overselling is still a lie to the clients.
Resellers win clients lose.
What do you think your client will react if you say to him : "Because you only use 25% of your allocated bandwidth resources, then I will sell the left 75% to others. Don't worry, you still have to pay for 100%." :D

In the today's hosting market you don't have a choice - you have to oversell. How much oversell is a different story.

[peter phillips]

In the today's hosting market you don't have a choice - you have to oversell. How much oversell is a different story.

Oversell means to sell beyond the means of delivery so it does not look good, but if you do it carefully based on your experience, make it meaningful with some statistical data then it can be done. :)

[dannybedor]

In the today's hosting market you don't have a choice - you have to oversell. How much oversell is a different story.

Yes we do. I don't oversell and I know that all of provider I was using was not oversell to. I also believe that many of hosting provider on this forum member is not overselling.

I am not offending the 'overselling people' but like peter phillips said you have to be real careful. I knew some host that was down because of their overselling bussiness.

[ayksolutions]

I still say that overselling is a smart business decision if you know what you are doing. I strongly disagree with over-population of servers/resources. You have to know when to stop, but none the less, you end up losing a lot of resources if you do not.

[IceBlueHost]

I tend to agree with ayksolutions on this one.
There is nothing wrong in overselling to a certain degree, but you have to know when to draw the line or it will undermine your servers and your customers.

You will find that just about nobody will come close to using all their alotted webspace and bandwidth, so that's a bit of a waste. People generally tend to get hosting plans which are actually way too large for their needs. I think most customers overestimate what they actually need.

There will of course always be exceptions, which is why you always need to keep a close eye on things and make sure none of your systems get overloaded.

[1PlanHost]

Let me first say that overselling has caused the demise of many a hosting company. I have been in this industry for nearly 10 years (yes I am the old guy) and have seen this happen far too often to mention.

In this intense competative industry everyone tries to up their competitors with more features and more bandwidth, more space, more email accounts, unlimited this or that for lower and lower prices. It really gets seriously ridiculous and leads to the harm of our industry overall. HostingCon 2005 on Chicago had several sessions on this very subject and all of them lead to this same conclusion.

So many hosting consumers have been burned by overselling, poor performance, reliability issues as well as poor customer support that they have become highly suspicious of trusting any hosting company. We get new customers every single week that start off talking with us on the defensive being downright hateful toward our staff without any justification other than they just came from a "bad host" that oversold their servers. We train our support staff to deal with this and reduce the barriers but it still takes a long time to develop trusting relationships.

It is totally understandable why hosting companies oversell. It is called profit seeking plain and simple. Those that sacrifice quality performance, security and reliability to achieve profitability are in for an uphill battle.

Best Wishes for a .Net Success!

[1PlanHost]

I just read my rant about overselling and realized I didn't answer the original question. Sorry about that, the topic is a serious pet peave of mine due to it's negative effects on our industry.

The answer is BOTH are responsible but the wholesale host is in my opinion the real source of the problem. The reseller needs to monitor his or her resources and not create unrealistic hosting plans that lead to overselling. The wholesale hosts on the other hand need to do the same thing!

We at 1PlanHost often get complaints from potential resellers who are evaluating our plans. They are used to unlimited domain and unlimited resources from other reseller hosts. They are litterally shocked when they see on our resellers site that we actually limit the number of domains and each and every resource in order to protect the security, reliability and performance of the servers.

You can certainly find cheaper plans that sell unlimited domains, unlimited email accounts, unlimited bandwidth and unlimited server space but at what cost to reliability, security and performance? Ask yourself these questions,

1. How important is your business reputation?
2. How do these unlimited plan companies pay their bills?
3. How long will your unlimited plan company be in business?
4. Is the company ran by a teenager in his spare time from one server out of their basement (or a cheap rented server) or a complete staff of certified professionals with numerous servers and a data center?
5. How many domains do they allow on each server? Unlimited domains on a server has proven to seriously affect reliability, security and performance.
6. Are reliability, integrity and professionalism important to your success as a business with your customers?
7. Does your reseller program place all new domains on one single server until it starts to show performance problems and then set up another server to oversell? (This is the most common method in the industry). Or do they distribute all new accounts over multiple servers evenly and cap the number of domains to less than 500 per server?

Best Wishes for a .Net Success!

[ASP-Hosting.ca]

Overselling is a normal business practice, used in many online and offline businesses. It is responsibility of the company offering the service to live up to its promises, nothing more.

[mikeerwin]

I agree that there is nothing wrong with over selling. I believe that everyone has over sold at one time. When Hosting companies run specials to draw new clients thats considered over selling but they only over sell for a limited time. So nothing is wrong with wanting to attract new clients by over selling to show the new clients what kind of hosting company you have. As long as you dont cut your throat by offering something that is unreal.

[ayksolutions]

We provide many unlimited features, without any give in security, reliability or service. We are also able to monitor our resources and make changes accordingly.

[1PlanHost]

Its like buying a boat that is supposed to fit 20 people. Instead of 20 you get 35 and charge them $5 a piece. You make a decent profit out of the 15 extras. Now, as long as the boat doesn't sink and it does not hinder its performance, there is nothing wrong with it.

Remember the Titanic? It was a Big fine boat that was supposed to be unsinkable so surely packing a few extra passengers in the lower decks for extra profits was harmless right? We in the hosting industry can learn from that history lesson that overconfidence combined with lack of preparations, foresight and emergency planning can be fatal.

If one thinks their servers are running fine now with all the overselling, just endure a few years and those "little sites" that were not using much resources in the beginning have all of a sudden grown large bandwidth eating space monsters. Before you know it, you have major trouble. It happens way too often and yes those boats do start taking on water eventually.

I would encourage those who are serious about developing a long lasting hosting business to define their models carefully with growth of the hosted sites in mind. A quick profit today may lead to disaster tommorrow so keep your eye out for iceburgs!

Best Wishes for a .Net Success!

[peter phillips]

IMO most of the overselling hosts are usually youngsters looking to get rich quick. For them there really is no limit and there is no too much. Ultimately it comes down to what a customer thinks is ridiculous or too much.

As long as a host can get away with it without running into too much hassle, they will continue to push the line a little further until one day the line can be pushed no further. As long as consumers remain uneducated about the industry, they leave themselves open to be taken advantage of.

By driving down the prices and increasing the number of customers per box, these hosts are actually driving themselves out of business. Low prices will result in poor service and ultimately a bad experience for the customer.

[ASP-Hosting.ca]

We provide many unlimited features, without any give in security, reliability or service. We are also able to monitor our resources and make changes accordingly.

Just curious, how can you make profit offering $10 per year hosting plans?

[HMarker]

Some overselling web hosts increase cpu power, server bandwidth and avoid unpleasant effects of over population. Thus, it depends on the company's ability to deal with problems and keeping their customers happy with holding their service quality in a steady state.

[KGIII]

I see this is an older post but it seems to be slowly active and I'm in the mood to get some typing out of my system.

I think that reselling, if done properly by giving attention to the actual bandwidth and diskspace at regular intervals, is possible. I can, with our company, resell. We haven't reached the point where we'd consider it and the only reason I would even consider it would be simplicity and profit's sake. The ONLY reason that I'd consider is my current provider has easy methods in place for me to upgrade in a reasonable time-frame so that when it reached a 70% full (assuming I'd oversold that'd be a good place to start as opposed to waiting for it to be 90% full if I'd not oversold) I'd upgrade to an additional drive.

In my search for a hosting company - it was long and painful but mostly for the poor support techs i harrassed for weeks/months on end - that was one of the many things I checked. One of the biggest concerns was the ease (and price) of being able to upgrade at any time. The choice has been made, sort of...

At this point - we don't say either way but I'll share with you - we have absoloutely no plans nor need to oversell. However, if we do make the choice to change that we'll then upgrade to additional disk, bandwidth, RAM, etc as need be when the margin hits a set 70%. In other words, should the resources be at, say, 70% of the alloted disk space being used we'll upgrade by adding another drive. At the opposite end, should we not oversell, when resources hit 90% - in case we should get a sudden influx of clients - we'll upgrade then.

Anyhow, that's just my view. I spent a lot of time researching (and between myself and the three other people involved) have probably been online and hosting for a lot of years. (We're all kind of old I guess. I'm the youngest at 32.)

Figured I'd join, post a little, see if it was going to be really active in here again at some point.

KGIII

[Nabeel]

i agree with peter.. that reseller would be responsible for that..

[~ServerPoint~]

Are you sure that it is good idea to bumb 3 year old thread to say that you are agree?

[Alcatrazz]

It is better to use service from the first hand, not from resellers... Choose the company which owns the equpment and network!

[danielryder14]

I would have the same opinion with Phillips on this too. It means that the host was not capable to forecast the right quantity of reserves his/her customers would use.

[sabrinasai]

Over selling is not a good practice

[coolmen666]

i need to know this too

[victorcloyd551]

Thanks a lot for the overselling. I am greatly obliged and highly thankful to you guys. Thanks a lot guys once again. Please share more information on this.

[ronniesilva751]

For example, any shopping web site, asking customer to fill the form, give personal information and complete the transaction process, customer will check before meeting any exchange of sensitive information that the following site is safe from hackers and Spam.

[bryanwalker983]

I ac here agree to what Phillip sais, that it means the host could not identify the exact amount of resources the client has decided to utilise in the work.

[tavioncurry69]

Likewise, I overlooked to comment in my first post that you are likewise serving out people looking for a ship ride, or in our case, certain space for their web based sites.

[Rahul_kurkure]

Thanks the provide the hosting company different work is manually industries in term of overselling.So I am sure that many people provide the forum and hosting.
not a loosing of them.

thanks.

[johnsingh]

I also think that typically overselling is a bad thing.

[shoponics]

really it is nice information share with us i strongly believe it is helpful for me and my other forum friends who want to more information about this topic