I'm trying to decide whether I should have an issue with a policy that prohibits overselling. It does seem that the policy would prevent others on the shared server from burning up all of the resources, but it certainly imposes additional work on the the reseller to properly allocate those resources.
Most Dedicated Servers have 2,000 GB of Bandwidth and 250 to 1 TB of Storage. You have up to only eight cores and 16gb of ram on most servers. I have heard that you can get millions of hits with a Dedicated Server but not a Virtual Private Server. You'd have to have thousands of accounts on a server to really push your limits since most people only use less than a gig of space and so on.
Its hard to make a decent profit without overselling a little bit. Its a part of the business risk, you do have to take it. You will not be competitive otherwise unless you have a very specific niche that you're targeting. In the "general webhosting" category there is too much competition and little room to decide your own prices or product specs, you do have to be competitive with all the others.
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Whether you want to oversell depends on the type of hosting your going to market.
Overselling isn't always a bad thing,
With VPS hosting, you shouldn't really oversell, as RAM is something you need to watch.
However with your shared hosting needs, you need to evaluate the variables in between what your allocating and what's been used.
Overselling is part of increasing your profit margin, however you have to be careful on your policies and always monitor usage, know your limits basically.
Overselling comes with benefits, not overselling comes with benefits as well. It is how you want to balance these that is the tricky part, as there are hundreds of oversellers on the market in comparison to stand-a-lone services that do not then you need to weigh it up.
You could always use the overselling feature to enable your resellers to oversell but be restricted by what they use.
In contrary, if you do not want them to be carried away and start overselling their product like mad then you can always prevent it, a polished policy is always a good policy if done well.
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