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Posted by James Burns on 02-May-2018 15:28:20

What is downtime costing your ecommerce business?

What is downtime costing your ecommerce business?

Most businesses face an impact to their top or bottom line when their websites go down. Few, however, are more directly affected by downtime than online retailers, where it causes revenue to grind to a halt and customers to take their business to competing websites.

Here, we take a look at how the costs of ecommerce downtime break down, as well as some of the steps online retailers and their partner agencies can take to combat unplanned outages.

The direct cost of ecommerce downtime

A number of studies have attempted to put a concrete figure on the cost of downtime, both in ecommerce and elsewhere. One of the best-known benchmarks is from the Ponemon Institute, which in 2016 showed the average cost of an outage across all sectors to be around $740,000 (£536,000). In ecommerce, the figure was higher still at $758,000.

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For an ecommerce business, perhaps the most obvious starting point for counting the cost of downtime is to look at the direct impact on your revenue for a given period. How much would you lose in straight sales if your site was unavailable for one, two, three hours - maybe even an afternoon? For some of you reading this, the figure will run into the thousands of pounds.

Of course, even at this basic level, the cost of an hour's disruption will vary. Perhaps the most diligent (and frightening!) exercise here is to look at the cost of downtime to you during peak online shopping hours/seasons and weight it accordingly - particularly if you rely on such key periods for a healthy bottom line.

Once you have a basic hourly figure, it’s possible to get an idea of risk exposure with your current ecommerce hosting provider by looking at their uptime SLA (this calculator may help you to get a clearer picture). However, remember that SLAs can be missed, and that downtime or sluggish store performance can also be caused by other factors such as heavy server load - a common problem for online stores at peak times, when their earning potential is highest.

Indirect costs - lost productivity, recovery and more

An ecommerce business can also incur a wide range of indirect costs from a serious downtime incident. Consider the following, for example:

  • Lost productivity: For as long as the incident lasts, some staff may be unable to do their jobs and others may have to focus on firefighting (such as answering calls from concerned customers) and other low-value work. If your business is a digital agency that builds and runs ecommerce websites for its own clients, this can be an even more significant cost factor as you pour resources into smoothing things over with your customer base.
  • Cost of recovery: Downtime can be caused by many different factors, and not all of them are as simple to recover from as others. In some cases, you may need to tap into expert resource to restore from backups, solve complex software problems and so on.
  • Reputational damage: In the ultra-competitive world of ecommerce, there’s no reason for inconvenienced customers not to flock to other websites and stay there - costing you both in terms of new and repeat business.
  • Damage to SEO: It’s easy to overlook, but downtime can also impact your search performance and therefore prevent shoppers from getting to your website for a time even after the incident has been resolved.

3 tips to combat ecommerce downtime

So what can an ecommerce business do to protect itself against the potential cost and reputational damage of an outage?

Thankfully, there are a few different steps you can take to ensure your website (or, in the digital agency scenario, your clients’ websites) isn’t more exposed to the risk of downtime than it needs to be. Here are three of our top tips:

  • Look at your hosting platform. Is it a good fit for your website in terms of expected traffic numbers (both now and in the future), hardware redundancy and backup provision? The quick and easy scalability of a cloud platform, for example, lends itself well to ecommerce businesses that experience seasonal demand or forecast rapid growth. We recommend you familiarise yourself on the differences between shared, VPS, cloud server hosting and dedicated server hosting in particular - our blog here has more information.
  • What level of uptime can your hosting provider realistically deliver? What’s their SLA - and, more importantly, is it backed up by high-quality infrastructure? (Any provider can say they offer a particular number of nines in their SLA, but only the best ones will be able to talk confidently about the technical controls they use to back this up.)
  • Can you rely on your hosting provider for fast and high-quality support to solve the problem? It may not be the first thing you think of when sourcing a hosting platform, but no provider is immune to downtime - so it makes sense to look for one that can show you glowing references from happy customers to demonstrate their value at a time of crisis. The ultimate "try before you buy" test? Give your prospective provider's support team a call and see how easily you can get through to someone that can help. If or when disruption occurs, you need the process of getting authoritative help to be as simple and fast as possible.

Want to find out more about choosing a hosting platform that’ll keep your ecommerce business high-performing, profitable and protected against downtime? Check out our free ebook, the data centre services buyer’s guide.

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Topics: ecommerce hosting

James Burns

Written by James Burns

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