The main difference between goods and services is that goods are tangible and their ownership is transferrable, whereas services are intangible and their ownership is not transferrable.
In economics, goods and services are two related concepts, and both are essential to satisfy our needs and wants. Goods are items with a physical existence; when we buy a good, we acquire a tangible product. However, services are transactions that do involve the transfer of ownership from the seller to the buyer. For example, when we acquire legal services from a lawyer, we do not acquire a physical product.
What are Goods
Goods are tangible items that satisfy human needs. In other words, they are products, items, or commodities companies sell, and consumers purchase to fulfill their wants or needs. When a consumer purchases goods by paying their price, they have ownership of that good; hence, then possession of that particular good goes from the seller to the buyer. Clothing, electronics, automobiles, food, stationery, and furniture are some examples of goods. The main feature that differentiates goods from services is their tangibility. Goods are tangible as you can touch and feel them; they also have physical attributes like size, weight, shape, and color. Furthermore, goods are manufactured, stored, sold, used, evaluated, and transferred. They can be used for one time, used repeatedly, or even shared with others. Goods can also be transferred to others, for example, as a gift, sale, or inheritance.
We can categorize goods according to different criteria. Consumer goods and durable goods are two such categories. Consumer goods are final products ready for sale bought by consumers, for example, a loaf of bread, a dress, a microwave oven, etc. Durable goods, on the other hand, are goods that last for a long time. They do not get depleted with use. Machinery and tools are good examples of durable goods.
What are Services
Services are activities or benefits one party offers to another. It is basically some work that a person/persons do for another person. These are activities other people, companies, and the government do for you. We can also describe services as transactions that do not involve the transfer of physical or tangible from sellers to consumers. Some examples of services include health care, legal counseling, landscaping, insurance, banking, and transportation.
Unlike goods, services are non-tangible as they do not have a physical presence. For instance, when you book a holiday, a travel agent provides you with a service; the booking itself is abstract – you cannot touch it, store it or transport it. Sometimes, the consumer might have to purchase an item to access the service. In the above example, you might need an air ticket to travel, but this air ticket is just the means by which you can access the service – travel.
Public services are services the government of a country provides for its citizens. Ensuring citizens’ security via security services (army, police, paramedics, fire brigade, etc.), healthcare, urban planning, waste management, and public broadcasting are some common public services.
Difference Between Goods and Services
Goods are tangible items or commodities that satisfy human needs, while services are activities or benefits one party offers to another.
Clothing, food, electronics, and furniture are some examples of goods while health care, transportation, legal counsel, and education are some examples of services.
While goods are tangible, services are intangible.
Transfer of Ownership
The ownership of goods is transferred to the buyer, but the ownership of services cannot be transferred. For example, when you buy a bicycle, the ownership moves from the seller to you, but when you buy an airplane ticket, there is no transfer of ownership.
Once purchased, goods can be returned to the seller, but services cannot be returned.
Goods can be manufactured, stored, and transported, while services cannot be manufactured, stored, and transported.
Production and Consumption
Moreover, there is a gap between the production and consumption of goods, but the production and consumption of services occur simultaneously.
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Goods manufactured can be identical, but each delivery of a particular service is never exactly the same as the previous services or future services.
Goods are tangible items or commodities that satisfy human needs, while services are activities or benefits one party offers to another. The main difference between goods and services is that goods are tangible, and their ownership is transferrable, whereas services are intangible and their ownership is not transferrable.