Monday, June 9, 2008

Cost of having the Website Down:

Today I wanted to purchase a product from which I had added to my wishlist yesterday.
After going through the complete process, when I was about to check out, I get this error message that the website is down. I have been using Amazon for years, and I was shocked.

My mind just started thinking, if this site stays down for even 20-25 mins, how many orders will be missed and how much revenue Amazon will lose. Even if we assume they get 100 orders/min with an average order value of $50.00, they would loose $5,000/minute which would translate to about $100,000 - $125,000 in 20-25 mins.

It's not only just revenue but consumers getting frustrated with the situation. Many people just order pretty much everything (clothes to diapers to electronics) from I think pretty much they have the complete market share but however if there was a new consumer on the site during this time, it would be a bad consumer experience and Amazon might lose a consumer. Calculating the consumer life time value would help understand the value of a new consumer.

Moral of the case - Keep a close eye on your e-commerce engine and fix it ASAP.

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