Greetings:

Is overselling of any product or service unethical?

Some argue that with proper management nothing is ever realy oversold -- then why call it overselling?

If you have a fixed commodity (be it disk space or bandwidth or whatever) and sell more than you have, don't you run the risk of not being able to deliver?

Also, does overselling cause a problem where people who would normally not consider the practice now consider it because "everyone else is doing it?"

Thoughts?

Originally posted by dynamicnet
If you have a fixed commodity (be it disk space or bandwidth or whatever) and sell more than you have, don't you run the risk of not being able to deliver?It's not unethical to take that calculated risk. It would be unethical if you ever were not able to deliver what you promise and failed to then compensate your customers justly.

Really, though, to not be able meet a diskspace demand, or even a bandwidth demand, should never happen -- it should never get that close unless you're really, seriously, overselling.

It's your responsibility to manage your resources responsibly and to satisfy your customers. Negligently failing to do that is unethical.

Ever buy a plane ticket? Chances are, you were oversold as this is a common practice in the airline industry. Doctors, dentists overbook constantly here in the U.S., especially these days as insurance companies try to squeeze them for more and more dollars.

Overselling is not unethical as long as you can deliver what you promise.

IMO, if you can deliver on your promises or features, you haven't oversold.

My def. of overselling is to make offerings that, if fully utilized by your clientele, would bankrupt your business, force you to fire a client, or cause a lower level of service.

I do believe that is an unethical business practice.

If you offer xMB of disk space, xGB of bandwidth, and x other features for x$, I believe you should have the capacity to fulfill those promises to every client you sign up or have the flexibility to seamlessly upgrade if a situation arises.

Greetings:

If you could deliver on what you promise, did you really over sell?


"It's not unethical to take that calculated risk."

Agreed; that's part of being in business. However, if the risk is in the customer's lap, and the customer is not made aware of that risk, and the customer is paying for something and not receiving it... then it gets into ethics and potential legal action.

I guess the problem I'm having is that those who state it is ethical will state, something to the effect "as long as you can deliver what you promise..."

Yet if that is the case, then how is it overselling?

RE: Doctors, dentists... does one bad practice make it valid for other industries?

How many patients like having their time abused because of overbooking?

Thank you.

Originally posted by dynamicnet
I guess the problem I'm having is that those who state it is ethical will state, something to the effect "as long as you can deliver what you promise..."

Yet if that is the case, then how is it overselling?Semantics. It was you who posed the question; are you using a different meaning of "overselling" than are those of us attempting to answer?

Apparently the answers are taking the word as reflecting simple math. For example, if the diskspace promised for all of your accounts is more than you actually have, that's "overselling." Essentially it's the meaning used in the airline industry, where the term was popularized. They're overselling because they're taking a calculated risk by selling more tickets than there are seats. Most of the time that doesn't affect any customers; sometimes it does. It's overselling in either case.

Call it whatever you like, if you deliver what you promise you're not being unethical. If you knowingly promise what you can't deliver or are unlikely to be able to deliver, you are being unethical.

Greetings:

"If you knowingly promise what you can't deliver or are unlikely to be able to deliver, you are being unethical."

Agreed.

Thank you.

Do you deposit money in a bank?
Do you consider you bank unethical?

Well all banks are overselling themselves...

The way banks make money is by only keeping fractional reserves. They never have enough money in house to cover all deposited funds.

You deposit $100 they loan out $90.

This system, makes them profits. Of course you always have the problem of what happens if there is a run on a bank....

Essentially... As with all service industry if every single customer attempted to maximize their use of a product the service company would be very hard pressed to fill their demands....

I know as a customer of a hosting company I don't come close to using everything I've paid for.

I'm sure alot of customers over buy (or over estimate) their needs either out of naivity or simply for security reasons. If I have a site that uses 6 gigs a month I might by a package that offers 10+ gigs a month in case there is a spike or my service grows. On the other hand I might lose vistors and only use 4 gigs a month...

Either way I don't consider it unethical, it's just a business model. The market will tell if this model will work and continue to work in the future.

yes

Originally posted by Studio64
The way banks make money is by only keeping fractional reserves. They never have enough money in house to cover all deposited funds.They also have, in most countries, a national government insurance program that protects customers from the dangers that would otherwise be inherent in that system. Once governments start insuring hosting customers, that will be a valid analogy.

He's not talking about a loss of the money, he's talking about that banks do not have the total amount of deposits in the bank. Put another way, everyone who has an account would not be able to come to the bank at 1:00 p.m. and get their balance. They can get it of course, just not all at the same time, and all customers at once like this.

Originally posted by JayC
They also have, in most countries, a national government insurance program that protects customers from the dangers that would otherwise be inherent in that system. Once governments start insuring hosting customers, that will be a valid analogy.

Um ... credit cards ...

Originally posted by Chicken
They can get it of course, just not all at the same time, and all customers at once like this. Read the terms of your bank account. Unlike web hosts who promise or imply a certain amount of space will be available to you when you want it, your bank does not promise that they'll give you your funds immediately upon demand. Mine, for example, includes a cause that they might, at their discretion, require 7 days written notice of an intended withdrawal from any account. They also say specifically that they may "discontinue or limit" withdrawals "due to the limited amount of currency available at a particular office."

Yes, I'm aware of this. Anywhooo...

I think we all get it, eh??? :confused: -and the question has been answered. So how 'bout them Lakers?! :D

Besides, it's a crazy comparison! Who ever said banks were ethical? :D

btw, using the bank comparison, there is a limit to what they can charge you, the interest gets to high, it is then loan sharking. There is no limit to what hosters can say they offer, ie unlimited bandwidth

of disk space could be considered unethical since that is a limited resource that you cannot easliy expand if customers start to use all you have sold. Bandwidth on the other hand can be expanded, if I lease a server that includes 400 Gig of bandwidth and I sell 600, and my clients use all 600 my data center wil still provide it to me, I am just looking at a large bill for the extra so it is my bad and my bill.

Well, just like anything else, overselling should be based on something, not just something you pull out of your donkey. There would be lots of po'ed people at those ticket counters if the airlines oversold those planes 4 times over. You need to have a basis for your overselling and not try to throw four hundred 500MB accounts on an 8.4GB hdd server. Use the cabeza.

Monte,

It's not just BW, you can get extra disk drive as well :) Or you can get a new server and move the customer in question to the new server. And deliver what you promised.

Simple as that.

Originally posted by masood
It's not just BW, you can get extra disk drive as well :) Or you can get a new server and move the customer in question to the new server. And deliver what you promised.Exactly; that was the point I was trying to make earlier, that failing to meet the demand should never happen in a well-managed company. Sure, oversell somewhat. Monitor your customers' needs, and expand to meet the demand. Originally posted by Chicken
Use the cabeza.The moss-covered three-handled family cabeza?

Or, to put it another way: expand to meet the demand, in much the same way that Chicken continually expands the vocabulary.

cabeza = head (Español)