Products vs Services
Differences and Similiarities
Products and Services are arguably the most important part of a business. No business can exist without offering a product or service, which shows how important they are.
- Products are goods, items, articles or simply things created or invented for purchase or exchange. Products are usually physical, but can also be virtual or even imaginary.
- Service is usually an act or task completed for or with an entity.
While different, some products and services have lots of similarities. Due to their confusing nature, lot of people have a hard time differentiating between the two. Fortunately, most businesses can offer and earn from both products and services, but that is not always the case.
Should you sell a product or a service?
First and foremost, you don’t have to choose one or the other, you can choose both. Should you have to choose one, then the right one for your business may depend on a lot of factors such as your skills, budget, risk tolerance, and preferences. In many cases, the business itself usually comes with the choice already made. For example, e-commerce businesses are product driven, while consulting businesses are service driven. Again not always the case, for one can choose to be a chef to open a restaurant or to teach others how to cook.
We think budget and risk tend to mostly influence the decision between product and service when starting a business. Let’s say you want to sell dog leashes but do not have all the funds for the inventory. You can choose to start walking dogs as a service to generate more money to get the leashes in bulk and resale. On the other hand, you may have the money to buy inventory but do not want the hassle of selling products. Then you can choose to start a lending service for others who want to sell leashes but need funding for inventory. With the lending service you can earn interest from your borrowers. In another possible situation of budget and risk, a chef can decide to teach people (service) to cook instead of taking the risk of selling meals in a restaurant (product) that may not sale and go to waste.
In conclusion, product and services can be very different and similar on many levels but both have potential to generate massive profits. Choosing between one or the other is more about what’s right for you and your business, rather than a competition between the two. Remember you don’t have to limit yourself to just one. A combination of both products and services can double your profits depending on the industry you’re in. All around us there are plenty of examples like some spas that sell beauty products, or gyms selling supplements and accessories. We always recommend offering as much as you can to keep your clients satisfied and reducing their need to look for more elsewhere.
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Founder – Atomic Web App and Services Inc.
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