Web Hosting Talk : Web Hosting Main Forums : Reseller Hosting : Oversell - Should we do it?

[kubicle]

If one manages it closely then it's very effective and can work well. I'm looking at Bluewho and do have a good reputation. However, my only concern is having someone else hog the resources because they're trying to squeeze the most out of their plan.

For those who oversell, does it work well for you?

[roguefoxx]

no, don't do it. If you don't have it, then why try to sell it? It's only going to create problems for you in the long run.

[kubicle]

Originally posted by roguefoxx
no, don't do it. If you don't have it, then why try to sell it? It's only going to create problems for you in the long run.

That's what everyone tells me, but I'm jsut curious to see how companies such as midPhase offer all that bandwidth, but then again midphase is a big company. I see overselling more as an effective marketing tool. A lot of people do not use all of their bandwidth. They see the large number and think it's a great deal and jump right on it.

But yea, I should spare myself all the problems before they start.

[markjut]

I would say don't do it.

[Shoey]

I did it. Yes, it created -too many- problems. If you want to run long, don't do.

[TMM]

Of course you should oversell - as long as you manage to have available capacity so that your clients are able to utilize the full space/bandwith allotment if and when they infact need it.

If you have 500 MB of server space, and 10 clients on 50 MB packages that only use 10 MB each (in other words you have 400 MB of unused space), it would be madness not to sell one or more packages out of the initial 500. This is because your clients are indeed getting what they bargained for; a web hosting package with up to 50 MB space. How you manage your space is totally irrelevant - though you'll obviously have to make sure there's room for it when one or more clients choose to put to use a larger portion of their space.

Overselling is a perfectly normal occurance in many business areas; airlines oversell seats (although they sometimes has to compensate passengers they can't find a seat for), telcos effectively oversell network capacity and so on. Sure there are numerous examples within the web hosting industry that companies have taken this way too far, which is often why the super-cheap "too good to be true" hosting plans often are just that. On the other hand, overselling allows for much more efficient capacity utilization and thus lower prices to the end user. If no one were to oversell, it would mean that vast amounts of server space, airline seats, cellular network capacity etc. would be totally wasted - and guess who would have to pay for that...? That's right - the consumers.

This article gives some interesting views on the subject.

[inteltechs]

Originally posted by kubicle
If one manages it closely then it's very effective and can work well. I'm looking at Bluewho and do have a good reputation. However, my only concern is having someone else hog the resources because they're trying to squeeze the most out of their plan.

For those who oversell, does it work well for you?

We did allow overselling for the first year but we stop doing it though. It's not worth it.

Kevin

[Aussie Bob]

Originally posted by inteltechs
We did allow overselling for the first year but we stop doing it though. It's not worth it.

I would have liked to have stopped overselling, but folks can work around that in their WHM. We just capped the number of domains per WHM Reseller account. Had pretty much the desired effect of not allowing overselling, and it also kept away the kind of client that thinks nothing of adding 400 domains to a $35/mth WHM account, so he can supply his $10/yr cheapo hosting plans.

[freak]

I would.

So long as you don't overdo it.

[wheimeng]

Originally posted by Aussie Bob
I would have liked to have stopped overselling, but folks can work around that in their WHM. We just capped the number of domains per WHM Reseller account. Had pretty much the desired effect of not allowing overselling, and it also kept away the kind of client that thinks nothing of adding 400 domains to a $35/mth WHM account, so he can supply his $10/yr cheapo hosting plans.

May I know how did you limit that? I see limit accounts instead of domains only.

[WHRKit]

Overselling in small numbers percentage-wise works pretty well for many companies. Always make sure you have resources to back up what you are selling though. 10%, maybe 15% should be the maximum overselling rate to stay on the safe side. You could do more, but you might put your business at risk.

[ldcdc]

Resellers should not be allowed to oversell IMHO. It can lead to problems on the long run, as AussieBob can attest.

Overselling can safely (rather safely) be done only as a result of the law of large numbers. Say you have 100 servers and you notice that your customers (perhaps 10000 of them or so) only use about 50% of what they buy and this is true for the last 2 years or so, then you may draw a few conclusions on how to oversell. But if you have just a couple of servers and a few hundred customers you'd better stay on the safe side and postpone overselling for a later time. (All this is IMHO.)

[IHSL]

TMM;
Your statement is why people should NOT oversell. Whether you realise it or not, your ramblings, said in a pro-overselling mode, actually made a better arguement AGAINST overselling.

My opinions on the matter are simple:
20% overselling on traffic/bandwidth: ok, so long as you have that capability with your datacenter.

Disk space: do not oversell. It isn't rocket science. If 'Joe Public' tries to upload a 20 MB file, and has 30MB spare, but is told that the HDD is full.. he's not going to be a happy camper.

A very funny (not for the customers) occurence happenned with a "company" named e-z-hosting.. they oversold on disk space to the point where a new account was created, and the new customer couldn't even do anything in WHM, because the HDD was full

We don't let our resellers oversell on disk space, because we don't do it ourselves. We let them oversell transfer traffic by 20%, because that's how we have tiered our primary cluster, which actually has 30% slack, for obvious reasons.

If you have the choice early.. take the 'right pill', so to speak, and better your business early on, you'll thank yourself later.

Simon

[TMM]

IHSL - perhaps if you had read my "ramblings" a little more carefully, you would have noticed that I stressed the fact that "you'll obviously have to make sure there's room for it when one or more clients choose to put to use a larger portion of their space".

As with most things in life, there are more shades to overselling than just black or white - and while I certainly do not promote the kind of overselling Aussie Bob points to ("the kind of client that thinks nothing of adding 400 domains to a $35/mth WHM account, so he can supply his $10/yr cheapo hosting plans"), I still believe it's perfectly good business practice to oversell within reasonable limits.

As I said in my first post, this means that 'Joe Public' should be able to upload his 20 or 30 MB file without any problems whatsoever - because the total server space must be monitored closely vs. used space, and a healthy margin of excess capacity has to be available.

As an example, a hosting company with 500 MB total server space could have 15 clients on 50 MB packages. Now if the vast majority of these clients were small businesses with standard websites of the informative type (a presentation of their business), that are pretty much left alone and each take up maybe 5-10 MB of server space, then it would be highly unlikely that just about every client should fill up his quota overnight and at the same time?

Wether or not to oversell, and to what extent, obviously depends on a variety of factors - the main point is that one has to be able to deliver the goods. Given the proper monitoring and good knowledge of one's clients, a slight degree of overselling should not be a problem at all, IMO.

[netstability]

Never planned to, never will.