In economics, goods and services are very common terminologies that are often used interchangeably. However, there is an obvious difference between goods and services that are based on the characteristics of each. Both these terminologies are used in most of the important economics discussions. So here in this article, you will get to learn the complete difference between goods and services. In this blog, our readers will go through the following concepts.
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Definition Of Goods
In economics, goods refer to the material items that can be seen, touched, or felt and are ready for sale to the customers. They are tangible in nature and can be used once or repeatedly. Goods provide utility and fulfill the requirements and needs of the customer. They can be durable or non-durable. Durable goods last for a long time while non-durable goods last sooner than durable goods.
Goods are tangible in nature which means they have a proper shape, appearance, size, and weight. They involve the transfer of the ownership from the seller to the buyer i.e. when the customer buys goods from the seller and pays the price, the ownership is transferred from the seller to the buyer.
All the tangible products like pens, bags, books, sports items, etc. that are available at the markets are examples of goods.
Definition Of Services
Services are the amenities, facilities, benefits, or help provided to the customers or clients. They are intangible and non-physical products that are provided by one person on the other person’s demand. They are perishable in nature as they can be delivered at a particular moment.
Services cannot be owned because they lack physical identity but they can be utilized. For example, when having dinner at a restaurant, you can avail yourself of the concierge services but you do not own the restaurant. This means there is no transfer of ownership in services, unlike goods. The receiver of the service is also required to participate while he is receiving the service. There is rough and tough competition among all the service providers in today’s age because different service providers offer the same services but charge different amounts.
All the benefits like IT services, Banking services, Health services, etc. are examples of services.
Goods Vs Services(Comparison Table)
Key Differences Between Goods And Services
Since we are comparing goods vs services with one another, here we have included the major key differences between goods and services.
- Goods are tangible and physical products that the customers are ready to purchase for a price. Whereas services are the amenities, help, or benefits provided by the other person.
- Goods are tangible items that can be seen, touched, or felt while services are intangible that cannot be seen and cannot be touched.
- The ownership of goods can be transferred from the seller to the buyer. On the other hand, the ownership of services cannot be transferred.
- The value of goods can be estimated easily. On the other hand, the value of services is difficult to estimate because every service provider has a different approach to carrying out services.
- Goods can be returned to or exchanged with the seller, but it is not possible to return or exchange the services.
- Since goods are products, they can be stored in a particular place. In contrast, services cannot be stored.
- Goods can be separated from the seller but services cannot be distinguished from the service provider.
- Goods are produced, traded to the market, and finally consumed, whereas services are produced and consumed at the same time.
Goods are tangible and transferable products, while services are intangible and non-transferable. Both these complete the needs and requirements of the people and make their lives easier. Goods are separable, while services are non-separable. This was all about the difference between goods and services.