What is the difference between goods and services?
Goods and services are commonly used terms in economics. Many business organization works around the clock to provide utility and meet the needs of their customers.
The main difference between goods and services in economics is that goods are tangible whereas services are intangible. The lesson provides detailed insight into the topic. Let’s dive into it.
Read More: Difference between Traditional and Modern Trade
What Are Goods?
Goods are physical objects which can be manufactured, stored, transported, marketed, and sold. Examples are Books, pen, bottles, bags, etc.
What Are Services?
Services are the output of an individual and they can be collective or individualistic actions. Examples are Postal services, banking, insurance, transport, communication, etc.
Comparison Chart: Goods Vs Services
| Basic Terms | Goods | Services |
| Meaning | Refers to products that can be seen, touched, and stored. | Refers benefits, amenities, and facilities provided by other people |
| Examples | Books, pen, bottles, bags | Postal services, banking, insurance, transport, communication |
| Nature | Tangible | Intangible |
| Transfer of ownership | Yes | No |
| Evaluation | Very simple and easy | Complicated |
| Return | Goods can be returned. | Cannot be returned back |
| Separable | Yes | No |
| Variability | Identical | Diversified |
| Storage | Stored for future reference | Cannot be stored |
| Production and Consumption | It has a time lag between the production and consumption of goods. | Tend to occur simultaneously |
Difference Between Goods and Services
- Good is produced while services are performed
- Goods are tangible and homogenous whereas services intangible and heterogeneous
- Goods are physical things that entail production while services are more of processes
- Goods can be returned back but services cannot once be offered
- The quality of goods can be measured while services cannot
- Goods can be transferred to another person while services ownership cannot be transferred.
- Goods can be stored for future use whereas services cannot be stored
- Goods can be standardized whereas services can be personalized
- Goods are nonperishable whereas services are perishable
- Goods are produced, traded, and consume while services are produced and consumed at the same time
Similarities between Goods and Services
- Both have position choice
- Have same design layout and production facilities
- Both have process existence
- Both involve the use of technology
- There is a concern of quality in both
- Aim at customer satisfaction
- Both have a production capacity
https://youtu.be/KTp3ePl4Jic
Summary
Both goods and services are two different terms in economics. However, they have some slight similarities in the end. The lesson provides a comprehensive difference between goods and services. Good Luck on your exam.
More Sources and References
- https://en.wikipedia.org/wiki/Goods_and_services
- https://www.researchgate.net/publication/225830366_Goods_Products_and_Services
- https://www.encyclopedia.com/finance/finance-and-accounting-magazines/goods-and-services