How Does Alexa Rankings Work?

Recently, there was a guest post by Rahul Gupta – Alexa never shows actual traffic rank. The post explained that Alexa

ranking does not show actual rank. I agree with that point, but the working of Alexa is not like Rahul explained. So,
today I am going explain the correct working of Alexa Rankings via this post.

What Is Alexa Traffic Rank?

Alexa Traffic Rank is traffic rank of a site. The traffic rank is based on 3 months of historical traffic data collected from the users of Alexa Toolbar. Also combined with different traffic data source and page views. Alexa also counts the number of visitors and number of page views of all the sites for Alexa traffic rank.
The main Alexa traffic rank is based on the data generated by this two sources. The change is determined by comparing the site’s current rank with its rank from 3 Months ago.

What Is Alexa Toolbar?

For those people, who are new to Alexa Toolbar. It is a toolbar which sends your browsing details to Alexa. But, it can be an essential tool for you in checking a websites Alexa Rankings instantly as well as increasing your site’s Alexa rankings.
You can download Alexa Toolbar from here.
Note: For now the toolbar is compatible with FireFox and Internet Explorer only.
Conclusion
The main data Alexa get’s from is Alexa Toolbar, so if your site gets 20,000 UVs per day and only 10% of them would be using Alexa toolbar then Alexa will get data of only 2000 visitors. The remaining visitors probably won’t be counted or they would get data of them from different sources.
So, all in all Alexa Rankings is not too much dependable for considering a website’s total traffic.