Goods vs. Services: What's the Difference?

Advertisement

Key differences

The difference between ‘goods’ and ‘services’ is that goods are the physical objects whereas, services are the actions or activities performed by someone. Both the words are entirely different, there might be a service to provide goods, and a person may get goods in reward of its service.

Advertisement

Goods vs. Service

Goods are the physical objects, or we may say tangible things are called goods. For example, pen, paper, cell etc. any tangible thing may be good. But when it comes to services, these are the actions performed by the people and are intangible. For example, a public service commissioner serves the public by helping people out. All the activities he performs for the people are his services towards them. Similarly, a milkman, a shopkeeper, a plumber etc. all are the service providers. This means that they perform different services.

Comparison Chart

BasisGoodsServices
DefinitionGoods are the physical objects.Services are the activities performed by the person.
OwnershipThe ownership varies hand to hand.Ownership remains to the person who has the skill or the job.
Tangible/TouchableGoods are tangible.Services are intangible.
Customer InteractionHaving nothing to do with human interaction.The one who provides service has to deal with the / interact with the customer
Evaluation CriterionA good may be useful or not.But the evaluation criterion is difficult for services as it includes hard work of the person performing.
Usage factorProduction and consumption do not happen at the same time in case of goods.Production and consumption happen to be at same time.
Importance of TimeA good is an object so is quite independent of the factor ‘time’.While a service must be performed in time. It cannot be delayed hence time is very important for it.
Advertisement

What are Goods?

Goods are the tangible object that possesses ownership. These are the objects that can be touched, felt and seen by the naked eyes by the customers. A person can use different goods to perform several actions for example different machines. The ownership of goods varies. A person owns a good until he has it or uses it. Once he sells it or gives it to someone else he no longer has any sort of right over it as the object now belongs to someone else. Goods have no special interaction with the customers. There is time lag between the two stages of goods, there production and then their consumption. The production and consumption of the good can never be exactly at same time because even if there is time gap of a few minutes, the gap still exists. These can be evaluated very easily because there is no in-between situation, either the thing is useful or not, either thing will work or not etc. there are no such evaluation criterion. These are the products manufactured and traded in and by market. These object after their production form an identical unit. Due to this identical unit the product by a same company when traded world while will have same properties and functions.

Advertisement

What are services?

Services are the activities performed. They may include goods or may also base on skills of a person. It is an intangible product provided by any person and charges the customer in return. They can only be delivered at a particular time. The services can also be provided form machines for example an ATM provides service of money transfer similarly a vending machine also provides service similar to a shopkeeper. Services cannot be distinguished as there are different people providing same service and it is done by same process. For example an ATM machine is a good and from different companies it would have different sort of label. When it comes to its service, all the atm machines worldwide provide same service of money exchange. Hence the service remained the same. The sale of service is basically the consumption of service. The production and consumption is done at the same time. Evaluation of service is a difficult task to do as different people perform same service so it comes to a comparison and is slightly difficult to deal with. The service provider has a direct connection to the customer because the service is needed very often.

Key differences

  1. Goods are the tangible objects and services are the intangible activities.
  2. Goods do not own single ownership of their ownership varies while service is owned by only a single person.
  3. Evaluation of goods is easier than that of service because every service provider uses a different approach, so it is difficult to analyze the one with better service.
  4. The production and consumption of service are at the same time while the there is a time gap between the production and consumption of the
  5. There is no such interaction of goods with the customer, but a service provider has to deal thoroughly with the customers.
  6. Being object, the goods are independent of the factor ‘time’. Whereas, service must be performed within the given time hence are greatly time dependent.

Conclusion

Services are the intangible economic source whereas the goods are the tangible economic source. Services are time-dependent, hard to evaluate, customer, interacted, single ownership and same production and consumption time. Whereas goods are independent of the time factor, easier to evaluate, no customer interaction, varying ownership and a time gap between the manufacture and utilization of the product/good.