Learn: Goods vs Services

Welcome!You've already learned why businesses exist and what they do. Today, we'll explore the difference between goods and services, a key concept in business operations.

What are goods and services?Goods are physical items a business produces and sells, such as clothes or smartphones. Services are non-physical actions or activities provided by a business, like haircuts or teaching.Understanding this difference is crucial because businesses often specialise in selling one or the other, or a mix of both.

Examples of goods vs servicesGoods include things like cars, books, and food. Services include actions like banking, cleaning, or delivering packages. Some businesses, like restaurants, sell both goods (food) and services (table service).

Why does this matter?Businesses need to know whether they are selling goods, services, or both. This affects how they operate, market, and manage their costs. For example, a shop selling goods needs inventory, while a service provider may focus more on employee training.

How do businesses decide to sell goods or services?Businesses consider factors like customer demand, costs, and skills. For example, a bakery focuses on goods (bread), while a delivery company focuses on services (transporting packages).

Review Time!You've learned about goods, services, and how businesses specialise in one or both. Let's test your understanding with a few more questions!