Sales are the driving force behind any existing business.
Sales can dictate profits, business expansion, hiring power and buying power (which in turn, lowers buying costs and increases your margins). The longer your store is open for business the more you can reach your sales potential. Running and operating a store costs money so when your business is not open not only are you not making money, but in fact you are losing it.
E-stores are wonderful as they offer high accessibility to almost all potential customers. This is due to the fact that almost all E-Commerce ventures can be accessed from all over the world on a 24 hour a day basis. There is no need to check for business hours or if this type of store has a branch in your town.
E-stores have running costs too. Of course there is no need to pay real estate rent but that expenditure is present in the form of server and maintenance fees. Since servers host the digital real estate on the web, server downtime is the equivalent of a boarded up shopping center. An E-commerce business owner can go from omni-accessibility to zero access in a matter of seconds. Your store that was once open for anyone will be closed for everyone and that means you are losing money.
Server downtime can manifest itself in a few ways:
- Http errors- familiar error messages will appear on the screen.
- Hijacked Pages- pages containing malicious content will load.
- Dead pages- there will be no loading at all.
- Slow load times- also regarded to be "soft downtime" (previous examples regarded as "hard downtime"). The site is not actually down but its performance will be severely affected to the point of being handicapped or even non-operational.
Often, your servers are up but your store is experiencing downtime. It is far more frustrating to know your hosting is operational yet your E-store is disabled. Many store owners do nothing at all when it comes to prevention efforts. Owners who do, usually use costly solutions which require previous technical knowledge and experience to implement and use. This deters other owners who lack the in-depth knowledge. The majority of store owners need an easy to implement, simple to run solution.
Store downtime can manifest itself in a few ways:
- Slow site performance- severely affects your bounce rate and overall transaction completion rate.
- Shopping cart failures- items will not be added to the customer's cart when chosen or even worse- checking out a cart can become an unavailable option altogether.
- Missing page components- vital page elements might not load. These include: shopping cart icons, Paypal buttons, UI elements such as navigation buttons, descriptive product pictures and so on.
Less Bang, More Buck
Technology introduces us to many new possibilities and by doing so it introduces us to many new failures and glitches. These are dealt with through the additional use of technology since it, and it alone, is capable of doing so.
There are a lot of solution based hardware and software developed for the sole purpose of keeping existing technology running. Therefore, it is not surprising to find out that the number of these incidents is declining in both occurrence and duration. What is very surprising to find out is that the cost per incident keeps getting higher and higher. This is due to business operations being heavily reliant on mission critical IT systems.
In 2010, 95% of data centers experienced server downtime compared to 91% in 2013. The average duration of these incident dropped from 97 minutes in 2010 to 86 minutes in 2013. However, the average cost for downtime incidents increased from 5,211 dollars per minute in 2010 to 8,023 dollars per minute in 2013. It is an increase of almost 54% in the cost, a huge leap no doubt. During the same years, the occurrence rate dropped only by 4% while the duration dropped by only 11%. Even though we are aware of the problem and are trying to fix it the problem continues to grow.
It is only logical to calculate missed sales in the cost of your store's downtime. However, most people would be surprised to find that lost revenue from missed sales only accounts for 22% of the overall damage sustained to the business. What most of us don't think about is the holistic cost of server downtime. See, the real cost is actually much higher when we take into consideration the following (percentages represent the cost relative to the overall damage and supplement the 22% of lost revenue from missed sales) :
- Damage to the brand image and company reputation- 37%
- Loss of user productivity and increased frustration- 15%
- Cost associated with compliance or regulatory failure- 10%
- The cost to determine the root cause of the disruption/failure- 9%
- The cost of technical support in order to restore the systems to operating state- 7%
In 2007 Amazon's net revenue was $14.8 billion which accounts to about $29,000 per minute.
On June 2007, Amazon.com crashed for roughly two hours. The estimated cost of this outage was a staggering $3.48 million.
A huge company like Amazon can easily sustain such a big hit and move forward. Other companies might not be so lucky. Many Amazon customers are willing to wait in order to make the purchase through the very popular site. Companies who don't have the Amazon brand recognition and loyal client base could very well see their customers heading to a different site to make their purchase. On top of that, with every site outage your chances of return visits from customers are getting smaller and smaller.
E-Commerce sites which are not as popular as Amazon are also more susceptible to lowered search engine rankings. If your site has a history of falling and crashing your search engine rankings will be heavily affected by it. Site inaccessibility and frequent downtime are in the top five negative ranking factors.
Veteran players in the E-commerce field will tell you server downtime is inevitable. It is not a question of "will this happen?" but rather "when will this happen?" and "how many times?".
Since prevention is not always an option for server downtime, focus your efforts on preventing store downtime. A recent startup that's gaining interest in the field is Shoppimon which allows store monitoring and real time alerts.
Do you know of any other tools to help fight server down time? Let me know in the comments below.