What"s Overselling
Overselling is a term used in the web hosting industry to describe a situation in which a company provides hosting service that are unsustainable if every one of its customers uses the full extent of services advertised. The term is usually referred to the web space and bandwidth transfer allowance, but now has been extent to the service after the selling.
Below is an example will give you a better understanding about what"s overselling:
If web hosting company has a server with disk space 100GB, and it will host 10 web sites for different customers and promise 20GB diskspace for each, then overselling will happen.
Why Overselling
Overselling is a marketing strategy. We can use the same case in above as an example. When web hosting companies provide 20GB disk space for each customer, and only host 5 web site in one server, he will find that not all the customers have used up all 20GB space, there will be a lot of space there without being used. So, the service providers decide to take some risk, and sell more accounts in one server. What he bets on is that not all the customers will use up all the signed resource.
Is Overselling Bad?
Overselling is very common in almost all the service industry. Let"s take the telecom companies as an example. They have millions of customers, what if all the customers dial out at the same time? Can their infrastructure support so many customers? The answer is definitely NO. So, shall they upgrade their infrastruture to avoid it, the answer is NO as well since it won"t happen in the real world. So, overselling is not really bad if you can monitor the service status closely, and make sure what you provide to your customer is still in line with the service level agreement, it should be ok. And overselling will bring more profits to the companies.