This article includes a list of general references, but it lacks sufficient corresponding inline citations. Please help to improve this article by introducing more precise citations. (June 2015) (Learn how and when to remove this template message)

Pens for sale
Barbier in Kaxgar
Pens are physical goods, while barbering is an intangible service.

Goods are items that are usually (but not always) tangible, such as pens or apples. Services are activities provided by other people, such as teachers or barbers. Taken together, it is the production, distribution, and consumption of goods and services which underpins all economic activity and trade. According to economic theory, consumption of goods and services is assumed to provide utility (satisfaction) to the consumer or end-user, although businesses also consume goods and services in the course of producing other goods and services (see: Distribution: Channels and intermediaries).


Further information: Productive and unproductive labour

Physiocratic economists categorized production into productive labour and unproductive labour. Adam Smith expanded this thought by arguing that any economic activities directly related to material products (goods) were productive, and those activities which involved non-material production (services) were unproductive. This emphasis on material production was adapted by David Ricardo, Thomas Robert Malthus and John Stuart Mill, and influenced later Marxian economics. Other, mainly Italian, 18th-century economists maintained that all desired goods and services were productive.[1]

Service-goods continuum

Service-goods continuum

The division of consumables into services is a simplification: these are not discrete categories. Most business theorists see a continuum with pure service at one endpoint and pure tangible commodity goods at the other. Most products fall between these two extremes. For example, a restaurant provides a physical good (prepared food), but also provides services in the form of ambience, the setting and clearing of the table, etc. Although some utilities, such as electricity and communications service providers, exclusively provide services, other utilities deliver physical goods, such as water utilities. For public sector contracting purposes, the electricity supply is defined among goods rather than services in the European Union,[2] whereas under United States federal procurement regulations, it is treated as a service.[3]

Goods are normally structural and can be transferred in an instant while services are delivered over a period of time. Goods can be returned while a service, once delivered cannot.[4] Goods are not always tangible and may be virtual e.g. a book may be paper or electronic.

Marketing theory makes use of the service-goods continuum as an important concept[5] which "enables marketers to see the relative goods/services composition of total products".[6]

In a narrower sense, service refers to quality of customer service: the measured appropriateness of assistance and support provided to a customer. This particular usage occurs frequently in retailing.[7]

In international law

Further information: International (Nice) Classification of Goods and Services

Distinctions are made between goods and services in the context of international trade liberalization. For example, the World Trade Organization's General Agreement on Tariffs and Trade (GATT) covers international trade in goods[8] and the General Agreement on Trade in Services (GATS) covers the services sector.[9]

See also


  1. ^ Shubik, Martin (23 June 2014). Proceedings of the Conference Accounting and Economics: In Honour of the 500th Anniversary of the Publication of Luca Pacioli's Summa de Arithmetica, Geometria, Proportions et Propotionalita, Siena, 18-19 November 1992. Taylor & Francis. pp. 236–237. ISBN 978-1-135-60837-8.
  2. ^ UK Legislation. "The Public Contracts Regulations 2006" Archived 11 December 2014 at the Wayback Machine. Regulation 2(1) s.v. "goods". Retrieved 25 June 2015
  3. ^ Federal Acquisition Regulation, Subpart 41.2 — Acquiring Utility Services Archived 29 January 2018 at the Wayback Machine, accessed 12 May 2018
  4. ^ "Difference Between Goods and Services: Visual Guide". Inevitable Steps. 3 March 2016. Archived from the original on 10 February 2019. Retrieved 3 March 2016.
  5. ^ Indiaclass, "Goods Service Continuum". Accessed 25 June 2015. Archived 25 April 2015 at the Wayback Machine
  6. ^ Bachelors of Management Students Portal ( "Explain the Goods-Service Continuum" Archived 1 April 2015 at the Wayback Machine, accessed 25 June 2015
  7. ^ Mattsson, Katriina (2009). "Customer satisfaction in the retail market" (PDF). Theseus. pp. 15–16. Archived (PDF) from the original on 4 August 2016. Retrieved 18 November 2015.
  8. ^ WTO, GATT and the Goods Council Archived 18 November 2015 at the Wayback Machine accessed 17 November 2015
  9. ^ WTO, Services trade Archived 10 January 2016 at the Wayback Machine, accessed 17 November 2015

Further reading