Calculating the Amount Lost During a Downtime
For e-commerce firms, there is nothing scarier than seeing a 404 or “Service Unavailable” message. As you know, every minute of downtime represents money lost. This is why websites are always scrambling to work with hosts that can guarantee 99.99% uptime. And these online retailers are willing to pay a premium for the service.
When it comes to websites, the uptime period is crucial. This is when your site can be accessed by your visitors and online customers.
A simple tool to know is the use of a website outage status checker. With a few clicks, you will immediately get a report not just on the downtime, but also on the history of problems the website encountered for a specified period.
In a perfect world, the hosting company should be able to offer a 100% uptime. But of course, that is unrealistic.
According to Hosting Facts, the average website has a downtime of at least three hours each month. Depending on your total sales, the amount would range from hundreds to millions.
Remember when Amazon suffered a glitch on its website at the peak of Prime Day in July last year? As it turned out, the e-commerce site lost $100 million in potential sales. Of course, the company belongs to the extreme end of the spectrum as it earns $2-3 billion per quarter.
Then again, you also have to worry about the competition. You never give your customers a chance to check out the rival e-commerce site.
When you suffer from hours of downtime, you can bet that your customers will visit the competition. There is a considerable risk of losing their business for good.
How Much Are You Losing?
Not all websites are created equal. An e-commerce site is valued more compared to a website dedicated to publishing blogs, videos, and other content.
That is why, when you compute the potential amount lost during downtime, you consider your monthly take to get the average.
The factors that come into the formula are:
- The cost of downtime per hour
- Reputation loss
- Cost of recovery
- Lost productivity
- Number of visits per hour
For instance, a 31-day month is equivalent to 744 hours. If you have 20,000 unique visits per month, you lose about 27 visitors each hour.
Although somewhat simplistic, if you want to have an idea of lost revenue, deduct the total monthly sales from the number of hours in a month. The result is the amount you lose for each hour of downtime.
To calculate the downtime, divide the number of seconds your website is down to 86,000 (which represents the total number of seconds in 24 hours).
If your site is down for one hour, it translates to 3,600 seconds. Divide that by 86,400, and you get 0.041. You then deduct that from the ideal uptime rate of 100%, and you get 99.51% of uptime percentage.
Of course, the easier way is to make use of a website outage status checker. The tool has analytics, as well as a complaints reporting tool, for easy tracking of the downtime.
By studying the data, you may spot trends.
For instance, if you have more hours of downtime during the peak seasons, your network may struggle to handle the additional traffic. Once you spot the problem, it is now easier to find a solution to prevent it from occurring again.