The true cost of downtime for your ecommerce business

Data Center Engineer
Adobe Stock

If you want to be rated among the best eCommerce merchants, you’ve got to go a step beyond the competition. That means providing more than just great products or services. You also have to prove that you’re a reliable company who values their business.

Part of demonstrating reliable service is being there when your customers need you. We’re talking about preventing downtime.

What is downtime?

Downtime is the amount of time, usually measured as a percent, that your website is offline or not working properly. For example, if your hosting service promises uptime levels of 99.9 percent, that means you’ll have downtime of less than one percent per month. That translates to 43 minutes and 50 seconds of downtime each month.

It may be tempting to choose a cheap or free hosting service to save money, but that could end up costing you more in the long-term. In a study by hosting comparison site Aussie Hosting, they found that discount/free hosts had 73% more downtime issues than regular hosting company.

Some amount of downtime is unpreventable. Like most systems, servers and websites require maintenance to keep them up and running properly. The more complex and distributed servers become, the more moving parts there are that need attention. You can account for maintenance by scheduling during non-peak hours and giving your customers advance notice that your website will be inaccessible for a brief period. However, unscheduled downtime due to hardware malfunctions, server crashes, and hacking is another story.

Downtime doesn’t necessarily mean that your website is completely removed from the internet, although it may be for a short time. Often, downtime manifests as:

  • Slow performance, such as longer processing times than normal. This increases bounce rates.
  • Checkout failures, like items not adding to customer shopping carts or an “unavailable” when they try to complete their purchase.
  • Missing page elements, like icons, product descriptions, or navigation buttons.

Basically, anything that causes your page to lose normal functionality contributes to downtime.

The true cost of downtime for online businesses

The above figures can be misleading in terms of the true cost to your business. Although 45 minutes of downtime per month doesn’t seem like a lot, you’re potentially losing a little over $100,000 in revenue for every minute your website is down or not performing properly.

That amount doesn’t even account for the true cost of downtime.

Five of the worst cases of downtime ended up costing their companies millions:

  • Amazon.com, $220,318.80 lost per minute
  • Walmart.com, $40,771.20 lost per minute
  • Home Depot.com, $14,474.40 per minute
  • Best Buy.com, $11,647.20 per minute
  • Costco.com, $11,614.20 lost per minute

Downtime costs are usually divided into two parts, intangible cost that you can put a quantitative total on, and tangible costs that you can measure to the penny. In general, downtime leads to missed opportunities, losses of revenue and reputation, and it can affect your SEO efforts.

Tangible costs.

Tangible costs are numbers that you can tie directly to your downtime. They include:

Lost revenue. This would total the average amount of money your store earns during a comparable business cycle times the number of hours, days, or minutes your website is affected.

Cost of system recovery. Once you add up the total number of hours your staff and any specialists or contractors you hire to deal with the issues at their rate of pay, this will give you the cost of your recovery. For example, you might have to have your design team rebuild your product pages from scratch or have a security specialist deal with system vulnerabilities.

Intangible costs.

These are costs that can usually only be estimated due to the amount of variables associated with them.

Damaged reputation. All but the most loyal customers will probably not return to your website if it doesn’t work when they visit. Even regular customers may buy an item somewhere else if they can’t get it from you when they need it. Word of mouth campaigns and customer reviews can cause further damage to your store’s good reputation. If your website is down for an extended time, or the outage was due to a breach, you may have trouble recovering at all.

Lost productivity. When your website is down or your staff is busy repairing issues, they aren’t getting their regular work accomplished. That means backups, delayed orders, and other productivity problems.

Drops in search engine ranking. Web crawlers like Google rate websites in a number of criteria. One of these is user experience (UX). If they can’t index and rank your page because it’s down or inoperable, you experience frequent downtime, or you’re down for an extended period, it will further cause your hard-earned spot in the SERPs to drop.

Downtime Graphic

What to minimize the amount of downtime you experience? In addition to choosing a reliable hosting service, it takes just three easy steps.

  1. Have a backup and restoration plan in place. This will shorten the time it takes to get back up and running.
  2. Make sure that any platforms or services are set to auto-renew. That way, you can prevent any service gaps.
  3. Keep your billing information up to date. Renewals or monthly billings will suffer if your card has expired or you change banks.

Final thoughts

Many elements contribute to the success of any business. Many of them are within your control, but some are not. When you need reliability, choose a reputable hosting service that guarantees a certain percentage of uptime in writing as part of your service level agreement (SLA), and make sure to find out in advance what their remedies are if they fail to deliver.

1 COMMENT

  1. We use uptime robot which is good, however with our shared host there are times when other users on the server cause a memory surge (or something else with a technical name!) and uptime robot does not pick it up as technically the server is up, it just cannot display/function the website.

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