What Is the Difference Between Product and Service?

It’s essential to understand the distinction between products and services, as they have a significant impact on a company’s operations, revenue, and overall strategy. While the two terms are often used interchangeably, they represent different types of offerings that require different approaches to management and delivery. 

This article aims to clarify the difference between product and service and why it’s crucial for companies to have a clear understanding of both.

Before we begin, you can get started with a free two-week trial with Wrike to streamline all your professional services tasks in one platform.

Products vs. services: Explained

There are a number of small nuances that separate products or services. However, the biggest difference between service and product lies in tangibility. 

• Products are generally tangible items — something that your customers can physically hold in their hands. Examples of products include:
  • A company sells branded swag and merchandise to other businesses.
  • A local bakery sells artisan bread and pastries to customers.
  • A supplier sells office furniture like desks and ergonomic chairs to businesses.
  • A tech company sells hardware solutions like servers and networking equipment.
• Services are intangible — something that you provide or perform for another person. Examples of services include:
  • A company provides graphic design expertise to other businesses.
  • An IT firm offers managed IT support services for small businesses.
  • A logistics company provides supply chain management and delivery services.
  • A consulting firm advises corporations on improving operational efficiency.
  • A media company offers streaming services to customers.

Typically, any company that offers services focuses on fulfilling customer needs through professional expertise or customized solutions.

Admittedly, the waters can get a little murky in the product vs. service conversation, as many services often result in some sort of tangible deliverable.

Let’s look at some different product and service examples. A graphic designer provides a service, but that usually leads to a physical product — like brochures, business cards, or a new logo. Or, a law firm might provide legal services, but that could lead to tangible documents like letters and contracts. 

Additionally, it’s possible to combine services and products. For example, think of a subscription meal kit. The subscription itself is a service that provides meal preparation products.

Still scratching your head? To add some more clarity to the service vs. product debate, let’s look at a few more notable differences between the two:

• A product is more frequently a one-off purchase, while a service can be recurring.
• A product can be returned, while a service has to be canceled (usually with notice).
• A product has many different variations, while a service is more standard and straightforward.

Grasping the somewhat nuanced difference between “product” and “service” can be tricky, but it’s important to ensure you’re using the right messaging with your customers.

The above definitions and bullet points will help you get a better grasp on whether you offer a product or service (or both), so you can better emphasize your deliverables — and, even more importantly, your value.

Streamline your work with Wrike

Understanding the difference between products and services is vital for any business that wants to achieve long-term operational success. By being aware of these distinctions, companies can tailor their strategies to meet the specific needs of their customers and optimize their processes for maximum profitability.

Fortunately, Wrike offers robust solutions that can help businesses effectively manage both product and service offerings. With powerful tools for planning, tracking, and collaboration, Wrike enables teams to streamline their workflows in one place. 

Our customizable dashboards and reports also provide valuable insights into project progress, enabling managers to make informed decisions and ensure teams are working at their best.

In summary, whether you’re delivering products, services, or both, Wrike can help you take your projects from start to finish in record time.