Amazon.com Downtime Cost
The web is aflutter with Amazon.com being offline for the better part of several hours – it got me and Boris thinking: just how much is this costing them?
The answer is simple: about $33.96 in revenue per second (or a modest $122,260.27 an hour), based on Amazon.com’s $10.71 billion dollar revenues in 2007. Which translates into a lost profit, based on annual profit figures of $190 million, of $6.02 per second (or $21,689.50 an hour).
People will just delay their purchase so you need to derate the $6.02. Also who buys books in June?
Yeah, true enough. While summer is prime book-reading time, most consumer businesses make-or-break their numbers in Q4 around Christmas. Therefore this estimate is naive in that it is based on the assumption that Amazon.com purchases occur evenly over the year.
Even still, there can be no doubt that this downtime is costing Amazon some serious dollars. One also has to wonder what, if any, downstream ramifications it has on their supply chain.