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  1. #1

    Why do they do it?

    I'm newbie in web hosting. But I'm looking for it. I saw a lot of hosting propositions. Some of hosting providers propose very big web space quote (10Gb for example) and super Bandwidth quote (500 and more) and their prices are not very high ($3-4 per month) Why do they do it?

  2. #2
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    Do a search here for "overselling", there is a new thread about it every day.

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    Because of Greed?
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  4. #4
    thank you very much

  5. #5
    Because not all clients use all their resources. This gives the host a chance how to offer more web space and data transfer. As said YetiHost, this strategy is called overselling. Some host use so called "controlled overselling" and some oversell too much and can get into troubles in the future.

    You mentioned package with 10 GB web space and 500 GB bandwidth. In my opinion good price for such package is about $5 - 10/month (with controlled overselling strategy).

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    Quote Originally Posted by webhostingtoplist
    You mentioned package with 10 GB web space and 500 GB bandwidth. In my opinion good price for such package is about $5 - 10/month (with controlled overselling strategy).
    Your joking right?

    A basic entry level server will cost around $100 p/m and have an 80gb hdd and 1000gb bandwidth

    by your statement youd need to sell at least 10 of those plans (based on $10 p/m) to even break even.

    Thats an oversell of at least 4000gb bandwidth and 20gb hdd (remember thats without even making a profit)

    To me thats not controlled, thats stupidity and suicide.

  7. #7
    I told with controlled overselling strategy. ...because only fraction of webmasters will use all these resources. Most webmasters need less then 1% of these resources.

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    Quote Originally Posted by webhostingtoplist
    I told with controlled overselling strategy. ...because only fraction of webmasters will use all these resources. Most webmasters need less then 1% of these resources.
    To break even youd have to oversell your server by 500%, thats not controlled.

    Whats going to happen when all 10 of those clients (assuming your only breaking even) decide to use what theyve paid for and are entitled to?

    Using an overselling host is a gamble whichever way you put it, the host is taking a gamble that his/her users wont use all there entitled to.

    To the OP, avoid hosts that are selling ridiculous plans such as the above, do a search on here for overselling and youll know why.

  9. #9
    Host do this because they feel that they have to compete. Little do they know they are only killing themselves in the long run. Seems like if one were to jump off a cliff the others are likely to follow.
    RelyHost.com - Reliable Web Hosting
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  10. #10
    Quote Originally Posted by Fisco
    To break even youd have to oversell your server by 500%, thats not controlled.

    Whats going to happen when all 10 of those clients (assuming your only breaking even) decide to use what theyve paid for and are entitled to?

    Using an overselling host is a gamble whichever way you put it, the host is taking a gamble that his/her users wont use all there entitled to.

    To the OP, avoid hosts that are selling ridiculous plans such as the above, do a search on here for overselling and youll know why.
    I am sorry if I was not clear enough. So back to the qustion about price of 10GB and 500GB transfer hosting plan.

    I absolutely agree with you that if you have 10 clients that it is high risk to offer this package so cheap. Yes, if all of these webmaster use their resources the host is in a trouble. If you have 10 clients you cannot look at stats which say that only 1% will use all their resources because 10 is very low number for any stats.

    In my opinion, overselling is really bad idea for small hosts.

    But what about hosts with 1,000's clients? These hosts probably have some stats how many webmasters use how many resources.

    If you have 100 clients and 1% use all resources and 99% in average 100 MB webspace and 2,5 GB bandwidth you sold 20 GB web space and 750 GB bandwidth and you earned $500 - $1,000 (based on price $5 - $10/mo). This is what I call controlled overselling.

    Any other opinions, guys?

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    Quote Originally Posted by webhostingtoplist
    I am sorry if I was not clear enough. So back to the qustion about price of 10GB and 500GB transfer hosting plan.

    I absolutely agree with you that if you have 10 clients that it is high risk to offer this package so cheap. Yes, if all of these webmaster use their resources the host is in a trouble. If you have 10 clients you cannot look at stats which say that only 1% will use all their resources because 10 is very low number for any stats.
    Thats not what i meant, what i meant was that youd need at least 10 clients to break even and even then youd be extremely overselling (500%)

    If you have 100 clients and 1% use all resources and 99% in average 100 MB webspace and 2,5 GB bandwidth you sold 20 GB web space and 750 GB bandwidth and you earned $500 - $1,000 (based on price $5 - $10/mo). This is what I call controlled overselling.

    Any other opinions, guys?
    But wouldnt that make it far worse?, if you have 100 clients on that server youve sold 1000 GB Webspace and 50,000 GB Bandwidth regardless of how much they actually use.

    Now thats an oversell of around 9,920 GB Webspace and 49,000 GB Bandwidth.

    Again, thats not controlled, far from it.

    Does your server have anywhere near that much resources?

    Dont gamble with your customers and dont compete on price, your only digging yourself a grave, if you provide good quality service and realistic plans for realistic prices then youll more than likely suceed.

    Anyway, im going to bow out of this thread now, ive made my point clear and re read them, they are valid ones.

    End story?

    Avoid oversellers, they are basically selling what they dont have, now is that false advertising? only the consumer can decide.

  12. #12
    Quote Originally Posted by Fisco
    Now thats an oversell of around 9,920 GB Webspace and 49,000 GB Bandwidth.

    Again, thats not controlled, far from it.
    Why it is not controlled if I know that these 100 poeple will use in average 20 GB of webspace and 750 GB bandwidth?

    Isn't there huge reserve for case that on the server will another website using more resources?

  13. #13
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    Quote Originally Posted by ZoomCities
    Because of Greed?
    Greed? If they were charging high prices for very low quotas, that would be greed. If anything, I'd consider it being extremely generous.

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    Ok, so maybe i changed my mind about bowing out.......

    Quote Originally Posted by webhostingtoplist
    Why it is not controlled if I know that these 100 poeple will use in average 20 GB of webspace and 750 GB bandwidth?

    Isn't there huge reserve for case that on the server will another website using more resources?
    You DONT KNOW that they wont use everything theyre entitled to, your hoping they wont.

    Your gambling with your customers and servers so that you can make more money out of each server, as someone said earlier on, its greed.

    Now whether thats controlled or not you cant claim your not taking a gamble.

    How can you (or any other overseller) justify selling at least 1,000 GB Webspace & 50,000 GB Bandwidth when you only have at the most 10% of that.

    misleading - adjective

    - misleading information/statements

    - Adverts must not create a misleading impression.
    scam - verb

    - A ploy by a shyster to raise money.

    - A fraudulent business scheme

    - Deprive of by deceit
    As harsh as the 2 above definitons sound they are both true when it comes to oversellers, not sure why? just ask.

  15. #15
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    becuse there poorly ran you get what you pay for in the hosting game 90% of the time
    you pay little you get crap
    you pay more you get service support a plan that isnt full of lies etc
    In buying hosting your better off finding a company that dont base there company on CHEAP HOSTING! look for ones that say We care Great Service Respctable prices etc etc them CHEAP HOSTING! companys are mostlikley ran by kiddes or people heading to bankrupsy lol
    Sorry for my spelling too
    Hope you find a good plan and have little issues with them

  16. #16
    Quote Originally Posted by Fisco
    You DONT KNOW that they wont use everything theyre entitled to, your hoping they wont.
    IMHO it depends on the number of clients. Small companies really cannot know this. But larger hosts have stats and from my experience stats works pretty well (this I one of many reasons why I love Internet)
    How can you (or any other overseller) justify selling at least 1,000 GB Webspace & 50,000 GB Bandwidth when you only have at the most 10% of that.
    Stats, stats and stats... (and experience).

    Of course that sometimes happen that on one server is more clients with more resources usage. No problem to move some of them to another server...

  17. #17
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    No offence!

    You have to be joking,
    People that oversell should not be aloud to thats like a pizza company charging extra for the chicken thats not on the pizza coz they dont have any.
    if you wanna run a hosting biz do it right and do it fair or dont do it at all!
    Its not rocket sience to know if you pay for that plan you may have reasons for using it
    DUH!

    No offence but overselling is just a stupid way to scam people out of money!
    and what happens if everyone decides at the same time they wanna use all there space and traffic

    This is not as stupid as it sounds becuse alot of people are sick of oversellers
    and one day it will happen taking a company in to bankrupsy at the same time
    I will not feel for them in the slightest either.

    I susgest staying away from oversellers coz there trying to compeat in the "cheap hosting market"
    Not the webhosting market lol

    I mean no offence but iv been with a few oversellers and i find them hopless

  18. #18
    Quote Originally Posted by underg
    No offence but overselling is just a stupid way to scam people out of money!
    No offence
    ...but what is better for webmaster? Host which use controlled overselling and offers 10 GB for let say $5 or host which offers only 100 MB for the same price? What is better for the webmaster?

    Of course if webmaster decided to use all resources and the host will cancel his/her account this is absolutely unfair. But if you run larger web host you have stats and you know how many webmasters need how many resources. So fair hosts have to work with these stats to avoid problems in the future.

    and what happens if everyone decides at the same time they wanna use all there space and traffic
    No offence
    ...but have you ever run some web host?
    ...only small fraction of webmasters need all their resources. Do you believe that will became some day when ALL webmasters will need all their resources? There will be always large % of small websites.

    Believe me, stats works...

  19. #19
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    Quote Originally Posted by underg
    This is not as stupid as it sounds becuse alot of people are sick of oversellers
    and one day it will happen taking a company in to bankrupsy at the same time
    I will not feel for them in the slightest either.

    I susgest staying away from oversellers coz there trying to compeat in the "cheap hosting market"
    Not the webhosting market lol
    You obviously have no concept of what overselling is and how many companies/industries do it.

    Bank, electricity, water, airlines, gyms, cruises, hotels, restaurants, phones, ISPs and many others. Do I need to keep listing them? I could do so all day.

    Whether you like it or not, most of the things you pay for are cheaper simply because of overselling. Do you have any idea how much day to day living would cost without any overselling?

    The only people who can claim their services are not oversold in any way are the ones who know for a fact that their upstream providers do not oversell and that rules out probably 99% of people here who claim not to oversell.

    Quote Originally Posted by underg
    I mean no offence but iv been with a few oversellers and i find them hopless
    I've been with a few datacenters that were hopeless, should I recommend that nobody uses a datacenter because of that? A few companies using irresponsible practises when overselling are not enough to judge part of/a whole industry by.

  20. #20
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    I think controlled overselling is very positive for both client and company. If I thought the overselling was going to become a problem I would stop advertising my products. So far I've had no bad experiences with my customers...some use their whole allocation and thats fine. Others don't and thats fine too.

    At the end of the day 99% of the time overselling seems to work. I don't think hosting companies should be scared of overselling, but if it gets out of hand they need to slow down. Its quite simple really.

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    yes we all have our thoughts see on the first page of this thread i agree with the others that dont like overselling if you wanna do it fine but at least tell people your doing it?

    I mean i never see on a site "we oversell"

    So really its a lie thats my whole point

    Why dont we see this on oversellers pages?

    OH IS IT BECUSE IT WILL HURT BUSNIESS?

    My point is made

  22. #22
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    Quote Originally Posted by underg
    I mean i never see on a site "we oversell"

    So really its a lie thats my whole point

    Why dont we see this on oversellers pages?

    OH IS IT BECUSE IT WILL HURT BUSNIESS?

    My point is made

    That makes zero sense. I never see "Call our outsourced support techs who really know nothing about our business", but that is acceptable practise and a lot of companies do it every day. I've already demonstrated multiple industries that oversell and it is acceptable practise, so why is hosting so different?

    If there was no overselling, probably about 99% of all hosting prices would go up drastically. Rented servers that have for example 2TB bandwidth allocated would only probably have 100-200GB (if even that) after the overselling from the DC was taken off, so try splitting that amount into even 200 domains per server, then take off the normal overhead and you would be left with less than 1GB bandwidth per month per customer. Remember that even though the resources are so low, you would stil pay exactly the same price as you currently do. Do you really still want to see all overselling stopped?

    I'll guarantee that wherever you have a site hosted, at least one person in the chain is overselling, meaning you are using oversold resources. Plain and simple, it goes on nearly everywhere.

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    *

    Quote Originally Posted by YetiHost-Wullie
    That makes zero sense. I never see "Call our outsourced support techs who really know nothing about our business", but that is acceptable practise and a lot of companies do it every day. I've already demonstrated multiple industries that oversell and it is acceptable practise, so why is hosting so different?


    So now your saying overselling is as bad as bad service?

    You are making zero sense also, becuse if there is NOTHING bad about overselling why dont they tell the truth?
    I mean if its as good as you say,
    WHY?
    lol
    Thank you for your input and reasons for on why overselling is good too
    one good thing about this world is no one is the same

  24. #24
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    Quote Originally Posted by underg
    So now your saying overselling is as bad as bad service?

    You are making zero sense also, becuse if there is NOTHING bad about overselling why dont they tell the truth?
    I mean if its as good as you say,
    WHY?
    lol
    Thank you for your input and reasons for on why overselling is good too
    one good thing about this world is no one is the same
    Why do they not say it? Because there is absolutely no reason for the customer to know, it does not affect them in the slightest. The overselling that affects customers is crazy figures like some of the hosts advertised here offer (Dreamhost/Site5 etc) but just because they go totally overboard does not mean you can label anyone who oversells the same. Responsible overselling is the reason many people can afford to live from day to day.

  25. #25
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    In my opinion...

    Start web hosting business and sell massive spaces/bandwidth with cheap prices - no profit until get more (over 1000) customers then earn money.

    I don't know how they make profit if overselling, it takes some time to get more customers. Customers are seeking cheap prices and love large spaces but they know nothing about overselling hosters will have poor support, overload server and downtime or suspended account for using too much resources. This is about attractive and targeting low-class consumers.

  26. #26
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    Yes you are right if there not going stupidly overboard its fine.
    and i spoz your not really paying for the chicken thats not on the pizza as its cheaper hosting

    Personaly I would rather pay more to know what i have and for service reasons also
    And people running sites for biz reasons shouldnt really use them either, well I wouldnt lets face it no matter what you pay its not going to kill you
    And i still think
    there are 2 types of hosts "cheap hosting providers"
    And "Webhosting Providers"
    One has good service and you know what you got if you decide one night to use all you diskspace uploading your everything you need :>
    The other you end up smacking your head on a wall for over 12 hours waiting for a email reply or online customer services that takes 1 hour to connect to a person :>

  27. #27
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    Quote Originally Posted by TRIBOLIS
    In my opinion...

    Start web hosting business and sell massive spaces/bandwidth with cheap prices - no profit until get more (over 1000) customers then earn money.

    I don't know how they make profit if overselling, it takes some time to get more customers. Customers are seeking cheap prices and love large spaces but they know nothing about overselling hosters will have poor support, overload server and downtime or suspended account for using too much resources. This is about attractive and targeting low-class consumers.
    Overselling does not mean you charge lower prices and it does not mean you offer unreal amounts of bandwidth or disk space. You could offer 10MB space and 100MB bandwidth for $100/month, but you could still be overselling.

  28. #28
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    Quote Originally Posted by TRIBOLIS
    In my opinion...

    but they know nothing about overselling hosters will have poor support, overload server and downtime or suspended account for using too much resources. This is about attractive and targeting low-class consumers.

    THat is why i think they should really explain more

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    lol

    Quote Originally Posted by YetiHost-Wullie
    Overselling does not mean you charge lower prices and it does not mean you offer unreal amounts of bandwidth or disk space. You could offer 10MB space and 100MB bandwidth for $100/month, but you could still be overselling.

    Yeah but then its not a issue is it as they could easly afford more servers!
    :p

  30. #30
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    Quote Originally Posted by underg
    Yeah but then its not a issue is it as they could easly afford more servers!
    :p
    That doesn't mean they will buy them though. Do you really think the crazy oversellers don't have any profit coming in? They could buy more servers with that money, they just choose not to.

  31. #31
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    Quote Originally Posted by YetiHost-Wullie
    That doesn't mean they will buy them though. Do you really think the crazy oversellers don't have any profit coming in? They could buy more servers with that money, they just choose not to.

    yeah but you still find with the cheap ones they dont care as much! anyway been nice talking
    Im getting no work done so i will have to be off hehe
    Thanks for all you input and have a nice day

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