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Difference between Goods and Services

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  • Last Updated : 01 Jul, 2022

Goods and Services play a crucial role in an economy. Consumer purchases many products in the form of goods and services to fulfil their requirements. Goods are tangible in nature as they can be physically touched or seen; however, services are intangible in nature. Both goods and services aim at providing satisfaction to the consumer. 

Goods

Goods is an item or product that satisfies the needs and wants of a consumer, provides utility, and is ready for resale to the consumer. They are tangible in nature, i.e., they are physical objects that can be touched, felt or seen. The ownership of goods can be transferred from one person to another or from seller to buyer. They can be produced according to their demand in the market. For example, mobile phones, watch, television, etc. On the basis of Durability, goods can be classified into two types: durable and non-durable goods. However, on the basis of consumption, goods can be classified as consumer goods and producer goods. Besides, goods can also be categorized as unsought goods, specialty goods, convenience goods and shopping goods. 

Services

Service is an intangible activity, which also aims at satisfying the needs and wants of a consumer. Services are intangible in nature, i.e., they are non-physical objects that cannot be seen, felt or touched, but can be experienced by the consumer. The ownership of services cannot be transferred from one person to another. They cannot be produced as they are performed as and when required by the customer. For example, eating dinner at a restaurant, UrbanClap services at home, etc. The three different types of services are business services, social services and personal services. Business services are further classified as Banking, Insurance, Warehousing, Transportation and Communication.

Difference between Goods and Services

BasisGoodsServices
MeaningGoods are tangible items that can be felt, touched or seen.Services are intangible that cannot be seen, felt, touched or seen; but are experienced by the consumer.
NatureGoods are tangible in nature.Services are intangible in nature.
TypeGoods are homogeneous and can be produced exactly the same. Services are heterogeneous and depend upon the person providing the service and the customer’s preferences.
Transfer of OwnershipThe ownership of goods can be transferred from one person(seller) to another(buyer). The ownership of services cannot be transferred from one person to another. 
InconsistencyThere is consistency in case of goods, as different customers get standardised demand fulfilled. For example, laptops.There is inconsistency in services, as different customers have different demands and get their demands fulfilled accordingly. For example, different people need different services in salons. 
InseparabilityThe production and consumption of goods can be separated. For example, chairs are manufactured first and are used by consumers later after a while. The production and consumption of services happen simultaneously. For example, eating food at a restaurant. 
InventoryOne can keep goods in stock as inventory. For example, a warehouse full of watches.One cannot keep services in stock as inventory. For example, getting a haircut at a salon.
InvolvementInvolvement of customers at the time of delivery of goods is not possible.There is involvement or participation of customers at the time of delivery of services. 
ReturnOnce purchased, goods can be returned to the seller.Once provided, services cannot be returned to the service provider. 
PerishabilityGoods can and cannot be perishable.Services are perishable. 
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