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Understanding The True Cost Of Ecommerce Downtime & How to Avoid it?

Imagine you are running an online eCommerce, and everything is going smoothly, your products are performing well, and your sales graph is breaking the upper thresholds. You are anticipating stacks of dollar bills from your revenue.

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Suddenly, the tables turn, and you witness an excruciating drop in your sales graph as your eCommerce store crashes. The eCommerce downtime can be the worst nightmare an online business owner can have, too, for some serious reasons.

The eCommerce businesses often overlook the probability of website outage or downtime. Choosing the cheapest hosting provider, eCommerce platform and compromising other things can sometimes be the costliest mistakes. A website outage during peak sales can cost you a major chunk of your annual revenue.

This article is all about the true cost of an eCommerce site outage and highlights some tips to avoid it.

How Much Does an eCommerce Downtime Cost?

Website downtime can hit hard for eCommerce businesses. It can affect the business both in short and a long-term. The outages can be classified into two types – planned ones and unplanned ones. Planned outages cost less comparatively to the unplanned ones, they maybe due to store upgrade or maintenance.

Translating the cost of unplanned downtime into dollar bills is really easy. Just calculate your per minute revenue from your annual revenue and multiple that figure by the total minutes of downtime.

Revenue loss = (Gross Annual Revenu/Total Working Hours) x Impact Percentage x Hours of Downtime

In the same way the labor cost of the affected employees can also be calculatedBut, the actual cost is not just limited to that.

Calculating the exact cost of site downtime is almost impossible for businesses, and it may vary from business to business depending on various factors. The chart proviced below shows the range of total cost per minute of an unplanned outage for different organizations.

[Source: The Ponemon Institute & Emerson Network Power]

Site downtime can directly hamper the ongoing sales on the online platform and affect revenue. Gartner conducted one research back in 2014 and found that the average cost of eCommerce downtime is $5600 per minute. It can be smaller for the startups and turn into a six or seven-figure loss for the giants. For example, Amazon, the eCommerce behemoth, loses over $1 million for five minutes of site downtime.

The direct impact of site downtime on the revenue is almost inevitable. Apart from the direct revenue impact, there are some other costs associated with eCommerce outage.

Deteriorates Brand Image

The first impression matters the most, which is true for eCommerce businesses. In online businesses, branding and reputation are major sales-winning factors. Businesses can not ignore the detrimental effect of a website outage on the branding. You had spent thousands of dollars on establishing your brand, and a few hours of downtime can tarnish it badly. That’s a huge loss!

New customers landing on your website for the first time during the outage will return with a negative experience. It increases the chances that the customer will never return to your site. This hits hard for the online businesses in the long go and creates trust issues amongst the audience.

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Affects Team Productivity

Website outages hit hard, especially for the IT & marketing wing of the business. The task of overhauling the website and fixing the downtime issues can pull back the team from their regular tasks.

Productivity cost = No. of Employees Affected x Percentage of Impact x Cost of Employees x Hours of Downtime

eCommerce downtimes can create chaos in the whole team. This may create a stressful situation in the team that may also affect the working efficiencies of individuals, resulting in a decreased production of the overall team.

Impacts The Rankings

Your marketing team has done very hard work for ranking your online website on the search engines. Website outages directly affect the eCommerce rankings as the visitors landing on the website bounce back frequently. This results in a high bounce rate and decreased average session duration of the visitors.

Short-term outages may not significantly impact the search engine rankings of eCommerce websites. However, the long-term downtimes may hit hard and deteriorate the rankings, which may require additional efforts and cost you extra bills for achieving them again.

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Other Costs

Some online businesses, such as SaaS, may also suffer from legal penalties due to breach of contract, service unavailability, and other incidences that can put them into legal issues because of the website outage. Moreover, hiring an expert for fixing the issue and getting things back on track can also add to the cost of an eCommerce outage.

What Causes a Website Downtime?

Now, as you have understood how an eCommerce downtime can hit you hard, let’s consider looking at some of the common causes.

  • Server Downtimes: If you run your eCommerce store on a shared server, your hosting provider may suspend or throttle operations on your website. Also, other websites on the same shared server can impact your site’s response rate, and in worst cases, it can result in site downtime.
  • Cyber Attacks: The Internet is full of the bad boys out there, and you can not ignore the possibility of cyberattacks, such as Distributed Denial of Service (DDoS) attacks. Such attacks send enormous requests and traffic to the website, resulting in a website crash.
  • Platform Issues: The eCommerce platform may sometime underperform or is not just a best for your requirements. Often, the third-party plugins or integrations can override the normal functionalities of your store and may result in outages. Major bugs, theme incompatibility, improper configuration, and coding mistakes can also result in a website outage.
  • Other Causes: Your eCommerce may also become inaccessible for several other reasons, such as unplugging the cord by mistake, unavailability of power, poor maintenance of hardware and software, etc.

How to Avoid eCommerce Website Downtimes?

ECommerce downtimes are inevitable. Here are some ways to avoid or decrease the chances of eCommerce outages.

Choose the Right eCommerce Platform

The website’s performance greatly relies on the eCommerce platform on which the store is built. There are plenty of platforms available online that create online shopping carts. The platform errors are not in your control, and therefore it is essential to choose a reliable and scalable eCommerce platform for your online business.

E-commerce platforms such as Magento, Shopify Plus, and BigCommerce are highly scalable and flexible enough to ensure streamlined store operations and shopping cart experience.

Go for a Dedicated Hosting

Hosting and server play a major role in keeping the website alive. Shared servers often have poor performance rates and major culprits behind website outages. It becomes essential for businesses to choose a reliable hosting provider. It is advisable to go for a dedicated hosting rather than a shared one not to compromise the service quality.

Generally, choosing the hosting provider that promises 99.99% uptime is advisable. Choose the one that promises high uptime through service agreements to get your website protected from service outages!

Monitor Your Site Speed Regularly

Slow loading website can be an indictor server overload and can anticipate a website downtime before it occurs. A slow loading website can crash anytime leading to website outage and therefore it can be prevent through regular reporting.

Moreover, ensuring a good website loading speed can promise a good user experience. There are plenty of ways to do that – if you are a Magento store owner, you can opt for Magento Speed Optimization Service to enhance your store for optimum performance.

Examine Third-Party Plugins & Integrations

The eCommerce extensions/plugins and app integrations can often cause major chaos in the entire system and result in an eCommerce downtime. New plugins, extensions, themes, and third-party integrations, which may be incompatible with your store, can cause an outage.

Therefore, it is vital first to test the integrations, themes, and plugins in the staging rather than the live site. Also, it is vital to examine the third-party extensions and integrations regularly for compatibility checkups. Moreover, you should also check for product reviews and ensure that the integration is reliable before using it in your store to stay on the safe side.

Secure Your Online Store

Website security should be at the pinnacle while running an online store. eCommerce businesses need to have a solid shield against the possible cyber-attacks resulting in an outage. Security vulnerabilities in your eCommerce store open the doors for attackers to take down your website through phishing, brute force, and DDoS attacks.

There are plenty of things to consider for improving the security of your eCommerce store. Regular upgrades, security scanning, and limiting the permissions to third-party integrations are ways to improve your online store’s security.

Avail a Website Monitoring Service

Assurance of 100% uptime for a website is nothing more than a myth. Thus, it becomes essential to get informed as soon as your site goes down to reduce its worse effects. Manually testing the website for availability can be cumbersome and tedious, and this is where using a website monitoring service can help.

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A website monitoring service can constantly check your eCommerce store for availability and inform you as soon as it goes down. This can help you to reduce website downtime by taking necessary actions. Investing in a good website monitoring service is worth considering the number of dollar bills it will save for your business.

Wrapping Up

In conclusion, website downtimes and outages can cost a lot of dead presidents for eCommerce businesses. The detrimental effects of website outages are not just limited to decrease revenue. It can also cost brand image, team productivity, and other additional expenses.

Online businesses should take care of several aspects to ensure maximum uptime, including the correct platform choice, third-party integrations, security measures, and hosting providers.

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