What does overselling mean in the context of web hosting?

Overselling is the practice where a web host sells more server resources (like CPU, RAM, and disk space) than they physically possess, banking on the statistical likelihood that not all customers will use their full allocated resources simultaneously. This is a fundamental business model for most shared hosting providers, as it allows them to offer low prices by maximizing hardware utilization. The core issue arises when the statistical model fails - if too many sites on a server experience high traffic or resource usage at the same time, performance degrades for everyone, leading to slow loading times or downtime. To identify providers that manage this responsibly, look for those that transparently disclose their overselling practices, enforce strict resource usage limits, and have clear policies for mitigating 'noisy neighbor' problems, rather than those that simply cram an excessive number of accounts onto a single server.