I have read a lot about how overselling is done by most hosts and I understand that it can be much easier when you are up and running, and you can see what resources your clients are currently using, and therefore judge if you can host more clients on the same server for further income. :)

What really interests me is:

1. When you first started out hosting did you set your pricing allowing for a certain amount of overselling to still make a reasonable profit and so keeping your prices lower and more competative?

or

2. You did not allow for any overselling and so based your pricing on making a profit from your available resources?

My thoughts are that no. 1 is the most likely scenario but I am very interested to hear your thoughts on how you arrived at how much of a percentage to allow for overselling and also what percentage you did allow.

I have posted a Poll so that I hope you will share how much percentage you allowed for overselling or if none at all. :)

Angler

I do not oversell at all.

I couldn't do with the hassle if things go wrong, I already live a fairly stressful life so I think to keep it all simple and just not oversell. It takes longer but i'll get there in the end.

I know that many do oversell. But, I wouldn't recommend it at all.

If you dont want to make it, please follow softwarerevue's advice.

Otherwise, run some numbers, On average how much disk space and bandwidth do your customers use.

IT IS A GIVEN FACT that nobody is going to use 100% of all resources and if you play it like that you are not very smart because you are spending (or forgoing) money that you could use else where.

Most sites dont use more than 1-2 GB of bandwidth, some use 10 GB, it just depends. Take an average of what people use and go with that number.

Why will you be safe in doing this?

1. Most will never use what they have.
2. Those that do use more, you bill them for the overage, and you just dont bill them what you have to pay for, you should at least get 5-7 dollars per GB depending on what you pay for it. This makes up for the people that dont use much.
3. Make sure you are getting enough resources to start, make sure your resources are not on the limiting side right away, such as dont accept anything smaller than a 36-40 GB hard drive. They arent expensive anymore.
4. Make sure you have enough bandwidth, it is hard to average if you only have 10 GB of bandwidth to start, you should at least about 40 GB plus per server available.

Thanks for your insights guy's :)

pretty much 50-50 on the Poll now :)

My vote is in :puke:

Overselling is the name of the game .. Ie RackShack -- their huge 400GB of transfer per sever per month -- sounds like a ton of bandwidth -- but I wonder how many people actually use even 10% of it (40GB) -- I wouldn't be surprised if over 90% of their customers use less than 10GB per month on those servers.

I think the same holds true for everyone else -- while some companies may not think they are overselling -- the pricing they are receiving from their uplink is. (unless your working directly with a datacenter in which case your probalby using the 95% rule)

Does this make it bad? No. Its just like airlines overbooking flights, dentist overbooking appointments, etc -- everyone is not going to show up (or in this situation -- not use all of their resources) -- so resource monitoring is very important.

Of course, starting out you need to do your homework to determine the bandwidth usage of different types of customers. (ahh the joys of marketing research) -- If your unable to get these numbers, its probably best to use a reseller plan where the provider gives you individual sites for your customers (predesigned packages) -- after using this a while, you can collect data and use it to understand bandwidth usage and become more aware of how to strike a balance between your costs and providing a quality of service to your customers that your happy with.

I agree with Naelurec on this one. I think you are pretty much right about everything in that post..

I think its safe to oversell on bandwidth - as you can always purchase more if your clients actually come to close to what they are using.

Yeah, how about 400GBs for $99/month?

Originally posted by goodness0001
IT IS A GIVEN FACT that nobody is going to use 100% of all resources ...
This is totally not true... we have clients that are using MORE than 100% and are paying us extra for going over their allocated bandwidth and space.

I guess I see a couple of different views on this poll.

First there are multiple resources that can be oversold, including:

Disk: You can oversell here, but will have to keep an eye on it.
Bandwidth: Overselling is fine here because you can always purchase more from your provider.

The big thing is once you go over your bandwidth monthly allotment, that your cost for extra bandwidth is covered when you bring new clients on.

Disk/CPU usage and other things are important to keep an eye on so that neither gets overloaded, but they are a set cost that you have either already paid for(colocated) or pay for monthly(dedicated). If these become overloaded you have to upgrade. The one cost that can vary is bandwidth, if your clients use more than you allotment you pay extra.

Our pricing is based on bandwidth, so even if every customer uses their allotment of bandwidth we make money. Of course the more customer that fit into our monthly allotment, the more $$$ we make. Lets face it most customers don't even use 500 mb, but one hot keyword on a search engine and they may pull 10gb in a month. I had a friend a few years back who had the work viper in his keywords. No problem with it until Dodge decided to name a car Viper. He got almost a half million hits in that month.

Oh well, just expounding what many know.

We do not oversell whatsoever, and we mention that on our site too.
I think potential customers may feel more attracted to a host from which they're sure he'll be able to offer them what they sign up for.

Especially regarding the kind of public we're targeting (high-bandwidth sites), there's a big chance people will use all of their allocated resources.

Originally posted by goodness0001
If you dont want to make it, please follow softwarerevue's advice. . . . . . . .:rolleyes:



:bawling: