People require various items to complete their daily needs and activities. They require various facilities as well. Sometimes people, as customers, buy these items or pay for different facilities.
However, these items or products and facilities are often useful for the growth of a country’s economy. They are also referred to as goods and services. There are several differences between goods and services.
Goods vs Services
The difference between goods and services is their appearance. Goods are items or products that are physically visible and can be felt by contact. On the other hand, the services are physically touchable or visible and are intangible.
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Goods are the products that are brought by people from various stores, shops or any other places. They can be seen by humans and can be felt by humans as they are tangible in nature. Goods utilize and complete the needs of the buyers.
Services are the perishable form of needs that a customer requires in their daily lives. They are provided by various suppliers to their customers at the spot immediately.
Services are also an important part of a country’s economy. No form of ownership can be shown on services.
Comparison Table
| Parameters of Comparison | Goods | Services |
|---|---|---|
| Meaning | Goods are the products that are brought by people from various stores, shops or any other places. | Services are the perishable form of needs that a customer requires in their daily lives. |
| Storage | Possible | Impossible |
| Type | Products, materials etc. | Amenities, facilities etc. |
| Estimation | Simple | Complex |
| Ownership | Transferrable | Non- transferrable |
What are Goods?
Goods are part of a country’s economy. They are items or products that fulfil the daily needs of people. They can be purchased by customers from various places like shops, stores etc.
They play an important role in a country’s economy. Examples of goods include books, shoes, pencils, electronic devices etc.
Various goods can be categorized and recognized based on different parameters like shape, size, length, width, breadth, height, weight etc. Depending on the item that is sold and its durability, and the item can be used once or repeatedly.
Goods also provide the appropriate utility to customers, and they are sold at an appropriate price to the customers.
Trade in the market is made of the goods that are bought by the customers. Three processes are involved in the entire activity of selling an item to a customer.
The first process is production. A product must be produced and made before it is sold. The second process is distribution. A product is distributed to the shops and stores that sell them to the customers.
The third and last step is consumption. The product after it is sold to a customer is used or consumed by a customer.
The estimation of an item is extremely easy. It is determined by taking into consideration several parameters like the current prices of the particular product, its size and weight, its quantity, quality, brand, condition etc.
If a customer does not like a product or finds a defect in it, then he or she can return it or exchange it.
What are Services?
Services are the facilities that are provided to people. They are also an important part of a country’s economy. A service is an activity that is provided to a customer by someone else.
The nature of the concept of services is intangible. It is an activity, or it is a facility that a customer is provided with.
Various goods possess a certain physical identity, but services do not possess any physical identity. They do not have shape, size, length, width, breadth, height, weight etc.
However, services can be distinguished and categorized into different types. Various organizations and institutions provide services to people. Various people are assigned with a specific task working in those institutions.
It takes some amount of time to produce an item and sell it to the customer, but in services, it is different. Services are a perishable form of facilities that are provided to people.
They are provided to the customer at the spot immediately. They are also not owned by any person or institution, and they are just provided to the customers and utilized.
For instance, if you buy a ticket for going to a certain place by bus, you don’t own the bus, but you just avail of the particular service and pay for it.
Different types of services include information technology services, entertainment services, performing arts and cultural services, various services provided by the government of the respective country, educational services, health care services, transport services, hospitality services, insurance services, rentals services etc.
Main Differences Between Goods and Services
- Goods are tangible. On the other hand, services are intangible.
- The ownership of goods can be transferred. On the other hand, the ownership of services can not be transferred.
- The value of goods can be estimated easily. On the other hand, the value of services is difficult to estimate.
- Goods are either returnable or not returnable. On the other hand, services are not returnable.
- Goods are products or items. On the other hand, services are facilities or amenities.
- Since goods are products, they can be stored in a particular place. On the other hand, services can not be stored.
- Goods are not perishable. On the other hand, services are perishable.
- https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1475-4991.1977.tb00021.x
- https://pubsonline.informs.org/doi/abs/10.1287/mksc.16.2.129
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Chara Yadav holds MBA in Finance. Her goal is to simplify finance-related topics. She has worked in finance for about 25 years. She has held multiple finance and banking classes for business schools and communities. Read more at her bio page.
