Top Difference Between Goods and Services - MohitECommerce

Top Difference Between Goods and Services Explained


All of us purchases lots of products for our personal as well as our commercial use and some of them are tangible and some of them are intangible. Based on this feature most of the products are differentiated between Goods and Services. Goods are tangible in nature on the other hand services are intangible in nature. For a better understanding here is all the detail information explained about the Goods and Services.


Goods are all those products which are offered by the sellers to satisfy the need of buyers. Mainly they are tangible in nature which means all the products which you can touch, smell, grip, etc before purchasing.

Apart from its tangible nature, goods are classified into two categories which are based on their durability. There are many goods which last long for more than a year such as electronic items like TV, AC, refrigerators, washing machines, cars, cycles, etc. On the other hand, there are many goods which only last for a small period such as food items like vegetables, coffee powder, and much more.

Goods have a certain shape, size, colour, physical structure and much more. They can be branded, labelled or neatly packed. Also, they are produced in advance to match forecasted future demand and can be stored in warehouses or inventory for future sales. Nowadays anyone can start ecommerce business and increase their Goods sales by registering on different Marketplace.

Here is a brief overview of the goods:

What are Goods?

Goods cover all the physical products. It can be produced in one place and consume at another place. 

Different examples of Goods:

  • Furniture
  • Television
  • Pen
  • Notebook
  • Coffee makers
  • Shampoo


Philip Kotler who is also known as the Father of Modern Marketing defines, Services as an activity or benefit, that one person can offer to another which is intangible in nature and does not result in the ownership. Most of the time service is not tied to a physical product.

Now we know that services are intangible in nature which means it is not possible to see, touch, grip, smell and taste the services. Also, the services are perishable. It should be utilized at a very low time period. This means it cannot be stored or produced in advance as we do for goods.

With services, there is no concept of transfer of ownership between the seller and the consumer. One of the big falls of services is that it cannot be measured in quality. For example, Car repair, banking, train travel, hotel services, teaching, hair cutting and much more.

Here is a brief overview of the services:

What are the services?

Services are a contract between buyers and sellers, where the seller offers any intangible products to the buyers.

Different examples of Services,

  • Teaching
  • Restaurant
  • Airlines
  • Internet Service Providers
  • Financial Consulting
  • Car repair
  • Insurance providers
  • Financial consultant

There are many difference between product and service in terms of pricing, features, durability when they are offered in monthly subscription or yearly subscription like Software are the products which comes in many types of subscription. Once the software product is purchased, then the vendor have to provide service for it as their product standards.

Here are 7 points explained to better understand the difference between goods and services:

1. Not Transfer the Ownership:

A seller can deliver a service to the buyer but they can’t transfer the ownership to the end customer. For example, when a person buys a tv then as good can be owned by a buyer but when you buy a ticket for a train, then the railway cannot be owned by the buyer.

2. Intangibility:

As we discussed above, services are intangible in nature. It is not possible to touch them, measure them and weight them. Apart from goods, you can’t taste, smell, touch, try on and take off service. Services are produced to meet the expatriation of a consumer and satisfy their needs. Also, you can’t store service, the quality becomes much difficult to asses.

3. Perishability:

The word, perishability means that the services can’t be stored, resold, and returned as no one can measure it. On the other hand, goods have bigger life spans and mostly they are seen as nonperishable. For example, buyers can buy the goods and use them in the future, but when it comes to service they can’t buy service and store it for future use as services have a deadline. If you don’t use it in time, it becomes useless. Another example to understand it better, an airline ticket is useless once the flight takes off.

4. Involvement of customer:

When you compare the goods and services, the involvement of the customer becomes one of the most important factors. When it comes to service, the customer gets more involved then tan the goods. For example, to use ATM’s customer has to involve much more to get better results. The same goes for vending machines and such self-service food chains like McDonald’s. Today such food chain like Subway has more than 50% involvement of customers where they can make decisions about the bread, ingredients, and sauces on a sandwich.

5. Quality Measurement:

Apple iPhones are a mass-manufactured product and there are millions of such phones around the globe. Unlike services, each and every iPhone models are the same quality product. Here you can’t find an iPhone that has weak software or smaller screen resolution. On the other hand, the services involve lots of manual work and require quality of work is dependent on the person who does the work for you. So, each service’s quality will differ from the other competitors.

6. Inventories are absent:

As we knew that production and consumption of services happen at the same time, which does not mean that you don’t require the raw materials to provide the service. For example, in a cafe or restaurant, a dish which you order is made only after the waiter gets the order. Once the waiter delivers the order to the chef they start preparing the food. 

7. Importance of time in services:

To differentiate service from the competitor, time can be the most important factor. It is important to exclude the possibility of any delay when you choose to deliver a service. Time is important and it is a key factor to determine. For example, there are many food chains such as Dominos they differentiate their service by delivering their pizza within 30 minutes. To satisfy the customers they need to deliver pizza within the decided time period.


Now we all know that there is a huge similarities between goods and services. But it is also seen that they are closely related and can’t be separated. Generally, many manufacturers keep the goods in stock with themself to meet the urgent requirement of goods. It also keeps track of the number of goods at the beginning and in the end.

In short, the production of services depends on the customer’s demand. Sometimes products offered by the sellers in such a way that it is had to differentiate goods and services like in the case of a restaurant, where the customer pays for the food they eat, also for the add on services of the chef, waiter, watchman, and such other add on services.

To flourish the economy in any country it become necessary to have both Goods and Services. As we all know that the service industry is growing rapidly and the manufacturing industry coming up with a lot of innovation in manufacturing techniques and processes all thanks to the technology. The service industry continues growing which means there are chances that they dominate the manufacturing industry in both developing and developed countries. 

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