A Web Hosting Company might have a server with 350 GB bandwidth. Web hosting company starts to sell plans with 10GB transfer quota. After selling 35 plans the bandwidth allocated for those 35 clients reaches the limit. However, the web hosting company notices that each month only 250-275 GB of bandwidth are "consumed" by the clients hosted on that server. It decides then to sell more hosting plans - over the 350 GB limit of bandwidth. After selling another 5 plans, the bandwidth consumption increased as expected at about 350-400 GB per month. If that happened, the service quality may lack and the server may crash and down.

Overselling is one of the most controversial topics surrounding web hosting. Overselling is a common business practice and can make your company much more competitive in the market if done wisely. As the web hosting market has grown more and more competitive over the years, hosting companies have increasingly begun to tout "unlimited bandwidth". After all, no web hosting company could truly offer you unlimited bandwidth. My opinion is that overselling is OK if it's being done carefully and based on experience, real, meaningful statistical data. Overselling however, keeps prices at low rates.

The average person looking for web hosting may not fully understand the cost and effort needed to run a hosting company. It is going to be quite difficult for you to find out whether or not a web host actually oversells.

Frequently there are companies that arise and offer hosting packages that abuse the overselling concept. Because the vast majority of web hosting companies do not state that they are overselling, you have to figure this out on your own. In addition to the overall reputation of a host and its history, it can be good idea to go back and ask some customers for some inside information about the hosting providers.

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