Overselling refers to the selling of resources that surpass the assets allocated to the server itself. This is widely used in the Hosting Industry to appeal to the public. It is used to lure unsuspecting customers into thinking that they’re getting “more for their money”. In reality, they are falling into a marketing ploy, and essentially get the exact opposite.
To take a closer look at this matter, let’s go through an example. Let’s say we-are-the-best-hosting.net has one server (because they’re just starting out). In order to compete, they adapt the overselling technique and sell 50GB web space for just $5.00 monthly. To a customer this may seem normal – “everyone’s doing that”. He would essentially be correct, “everyone” IS doing it; however it sure isn’t normal! Let’s go further in assuming that this server only has 150GB of disk space, and that it costs $90.00 to uphold. Well, if each of we-are-the-best-hosting.net’s customers receives 50GB of web space, ideally, they would only be able to store 3 accounts – and make $15.00 monthly. However, with overselling, they can simply sell 20 accounts – and make $100.00 monthly (leaving them with a profit of $10.00).
Overselling is very useful in the Hosting Industry; however it can have a very large impact on clients. By overselling, this particular web host has promised 20 clients 50GB of web space. Essentially, they have sold 1TB of web space, but can only provide 150GB. In order to ensure that things don’t go haywire, they begin to limit what you can do with your hosting in their ToS. When things get bad, they terminate a few clients and get right back to overselling.
