In business, products that are sold, traded or otherwise provided to consumers or other companies can be classified as either goods, which are tangible, or services, which are intangible. Most countries measure their economies on the production and consumption of both physical goods and intangible services. Some companies provide both goods and services, and others provide only one or the other.
Some goods are consumed, which means that they are gone, ineffective or unusable after they have been used once. Food is one example of a good that is consumed and must be replaced. Toothpaste, hairspray and deodorant are other examples of goods that are not practical for consumers to use more than once — the amount in the container is reduced as it is used, until it is gone and must be replaced.
Products that are not consumed as they are used will last longer before needing to be replaced. Some wear out after a few weeks, months or years, and others might be replaced by improved products before they wear out. Clothing can be worn many times but eventually can wear out or become out of style. Electronic devices might stop working after a few years, but consumers often upgrade to newer or better devices before then.
Other goods are more long-term in nature and might last for many years or even decades. Furniture, dishware and houses are examples of durable goods that are intended to be used for extended periods of time. Some products, such as automobiles, can last for a very long time if they are maintained properly.
Services are intangible products — those that cannot be seen or touched — that are provided to consumers or other companies. A physician provides healthcare to patients. Communications companies provide services such as Internet access, television programming and the ability to make local or long-distance telephone calls. Banks provide a range of financial services to customers, such as checking accounts and investment opportunities. Other companies provide services such as lawn care, plumbing, home repair, business consulting or transportation.
Often, goods and services are provided as a unified package, providing a well-rounded and attractive option for the consumer. For example, a restaurant can sell food items, which are goods, as well as provide services — the food is prepared and served, the table is set and cleared, and entertainment might be provided during the meal. Other companies sell goods and provide maintenance or repair services for those goods, or they might offer classes to teach consumers how to use those goods.
Most countries depend on the production of goods and services to power their economies. They also often impose taxes on goods and services to create revenue for their governments. Taxes sometimes are different for goods and services that are exported than for those that are consumed domestically. There also usually are taxes on goods and services that are imported from other countries. Some countries impose higher taxes on imports so that domestic goods and services will be more attractive to consumers.