What is Overselling in a Website Host Context, and Why is it Important?

The principle of overselling is simply whereby a company sells more services than it could provide at any one time. All utility providers oversell - since they know that not every customer will use electricity/water/gas (etc) all the time. Applying this principle to hosting, overselling is where a host offers more disk space and bandwidth that it can provide to all its customers.

So as a quick numeric example - suppose a host offers you 1 GB disk space. If their servers have 250 GB hard drives in them, then without overselling they could only host 250 customers on their servers. However the average customer doesn’t use their entire disk-space allocation - so the host then could either host more than 250 customers on their servers, or offer each customer more than 1 GB disk-space. The former would raise their revenue, whilst the latter would gain most customers due to offering higher amounts of disk-space.

Hence there’s nothing really wrong with simply overselling, since it can just mean that a host uses their spare capacity sensibly.

However, some hosts take the principle of overselling to extreme lengths and ‘oversell’ to an extreme level in that they may offer something like “100 GB disk space, 1,000 GB bandwidth - $5 per month” (etc). However this is solely a marketing ploy since it would be difficult for that host to offer that much disk-space or bandwidth to even one of their customers (since they’d incur a loss unless they charged $30+ per month for such a package).

So whilst overselling can be harmless and actually a good thing, be wary of ‘extreme overselling’. We always suggest that you calculate how much disk space and bandwidth you will require and choose a host that offers 50-100% more than your requirements. A typical website which doesn’t get more than a couple of thousand visitors per month will probably use no more than around 250-500 MB disk space and 1,000-2,000 MB bandwidth (if that).

Tristan Perry, Double Electric Blanket