Difference between Services and Goods

Two characteristics chiefly distinguish services from goods:

• Non-transferability of ownership — buying a service does not transfer ownership of anything physical.
• Presence of both provider and consumer — the service is realised only through their interaction.

Also, goods are produced while services are performed. A service is an act that cannot be taken home; what you take home is only its effect. And because services are sold at the point of consumption, there are no inventories.

Point-by-point distinction

• Nature — A service is an activity or process (e.g., watching a movie in a cinema hall); a good is a physical object (e.g., the video cassette of the movie).
• Type — Services are heterogeneous; goods are homogeneous.
• Intangibility — A service is intangible (e.g., a doctor's treatment); a good is tangible (e.g., medicine).
• Inconsistency — Different customers have different demands (e.g., mobile services); goods deliver standardised fulfilment (e.g., mobile phones).
• Inseparability — Services involve simultaneous production and consumption (e.g., eating ice cream in a restaurant); goods separate production from consumption (e.g., buying ice cream from a store). …