Everyday I see it over and over and over again! There are many Webhosting Providers that are fighting for the extra buck. You are overselling so bad that its getting pathetic, offering 1GB Space and 100GB Bandwidth for 4.95/month is a little out of hand. If you dont have the support or the resources to back yourself up you will see how quickly your business will fall. Trust me, I used to do it untill I finally realized how cheap people are letting Hosting go and your only hurting yourself. 75% of the people who offer plans like this usually fall down with the business in months because you will find out that it is impossible to run the service anymore because your broke. Overselling is just like free webhosting in a way, your giving so much extra resources for very cheap prices and in the end you wont have enough money to make a server payment or a Reseller Payment. I just advise some of the Webhosting Busineses to please be aware and watch what you do and remember, if your desperate for the extra buck then you shouldnt be in the business. You have to spend money to earn money! It could take months to get 1 client, be patient, before you know it you will be getting 5-10 signups a day and will be known for the great hosting your capable of providing.

Good Luck to all Webhosting Businesses and remember to be careful

Zach

I agree, very much. The hosting industry as it has been talked in other forums about, it got very stupid out there with the overselling. I've seen $0.99 for like 10GB, 120GB data transfer.

Right away, even a novice user, it makes him wonder how is it that this host asks only $0.99 for so much, when elsewhere you get it for like $99. I agree, got to be carefull and watch what you do in business.

Zach : Great post, great advice....well done....Welcome to Hosting Discussion!!! Good to have you on the boards and again, thanks for the excellent advice.

It is all about your target market. If you find a good market to dive into, you will be set. There are many markets out there that will laugh at you if you try to charge them anything under $50/month.

If all really depends on how critical the site is to the line of business they are in.

I still believe in you get what you pay for. Sure we all want to pay the least but it surely is hard to find the right host. I dont think anyone would do it for $5 or 99 cents. Maybe my sites are important to me more than someone looking for the lowest price so to me price is usually not what I focus on. Time around,. references etc matter so much more.

I have to say, I don't entirely agree. There are hosts that offer more than they can possibly provide, that is wrong. But overselling in and of itself is not bad. It's not bad because if you oversell by say 50%, but you have 12 months of history that leads you to assume that your average client only used 40% of his allocated bandwidth. There's nothing wrong with a host overselling if they're willing to foot the bill if one month spikes above what they would have expected. It's only wrong when they truly have no intention of fulfilling their offers.

I agree...Our company has a strict policy against overselling. We also believe you get what you pay for. Our prices aren't the cheapest, but I believe the superior service you receive is worth the investment.

Well, in some cases you don't get anything close to what you paid for

But as far as pricing, you can't automatically say another company is unreliable based on pricing. It all depends on how they run their business and what there plans are for the future. And if done correctly there is nothing wrong with overselling either.

I'd definitely agree with the fact, that if a web host has;
a) No intention to provide web hosting services,
b) No idea how to effectively manage it's overselling

It certainly has no place within the industry. I think the lack of market research contributes alot to the common poor overselling practises we see today.

There are a lot of these companies -- but believe it or not, some companies will pay, say, $50 per month for 500 MB of web space and 1 GB of traffic. Anybody hear of value added services? Hosting companies that are offering those plans rely on volume -- if their business model isn't supportive enough, they'll die off, so you don't really need to worry about them... just worry about those customers that fall into those plans. But hey, you never know, some of these web hosts that 'oversell' may actually be good at the service they provide.


JP

Well put, if there business plans are really that absurd then you just have to wait until they go under in a few months

Zach:

You oughtta shake your finger at the largest players in the hosting industry as they are the ones most responsible for overselling and then encourage everybody else to oversell as well (just to stay competitive).

The only reason why the large players survive the game while overselling is because they've factored in a natural attrition rate into their revenue objectives as long as they stay "net-positive" in their direction.

Roj

Over selling in the hosting industry is pretty common, as for hosting companies that selling hosting plans for .99 for 1 gig of space and 10 gigs of bandwidth also tend to attract unsavory clients (i.e. spammers, warze traders)