In business, the terms “product” and “service” are often used interchangeably. However, there is a big difference between the two. A product-based company sells physical products that need to be manufactured, while a service-based company sells services that are performed by people.
The main difference between the two types of companies is that a product-based company has a tangible output, while a service-based company does not. A product-based company’s success is measured by the number of products it sells, while a service-based company’s success is measured by the quality of its service.
So, if you are thinking of starting a business, you need to decide whether you want to sell products or services. Keep reading to learn more about the difference between the two!
What is a Product-Based Company?
A product-based company is one that relies on the sale of physical products to generate revenue. This is in contrast to a service-based company, which provides services instead of products.
The term “product-based company” is typically used to refer to technology companies, as most technology companies sell physical products (e.g., computers, software, etc.). However, there are many other types of companies that are product-based, such as manufacturing companies, retail companies, and even some restaurants.
What is a Service-Based Company?
A service-based company is a type of business that provides services to its customers or clients instead of products. The services can be intangible, such as consulting, financial, or legal services. Or, the services can be physical, such as maintenance, repair, or cleaning services.
Service-based companies are becoming increasingly popular because they offer a number of advantages over product-based companies.
Key Difference:
Service-based companies are different from product-based companies in a number of ways.
- First, service-based companies have no inventory because they don’t sell products.
- Second, service-based companies don’t need to worry about manufacturing or packaging because they don’t have products.
- Third, service-based companies often have lower start-up costs because they don’t need to invest in inventory or product development.
Difference Between the Product-Based Company and Service-Based Company
The table below shows the major difference between product and service-based companies.
| Particulars | Product-Based Company | Service-Based Company |
| Business | These are the businesses that have their own merchandise to sell. | These firms might or might not have their merchandise, however, their primary business is service. |
| Examples | Alphabet, Google, Facebook, Adobe, etc. | Wipro, Infosys, TCS, Cognizant, etc. |
| Hiring | Hiring a really restricted variety of candidates from prime faculties like IITs and NITs, and they usually don’t conduct field placements in tier-three faculties. | These are the mass recruiters in field placements. |
| Interview Process | Conduct a lot of interview rounds, and cracking interviews could be a bit tougher than Service-Based firms. | The Cracking interview is comparatively simple and has few rounds. |
| Salary & Hike | These give high salaries and hikes, conjointly the earnings are revised to support the value of living. | These give relatively fewer earnings and hikes. |
| Learning/Training | The Learning curve is nice, optimized, and economical suggests that are used. Also, you get to figure out the most recent technologies. | The training curve is average. Generally, they place freshers into support wherever the possibilities are that one doesn’t have the selection to pick out his/her domain. |
| Office Timing | Flexible workplace timings. | Strict workplace timings, around 7-9 operating hours per day. |
| Job Security | Relatively high. | Relatively low. |
| Revenue Invested | High for marketing and advertisement. | Very less. |
Conclusion
By now, you must have a transparent understanding of what a product-based company or a service-based company is and their differences. It totally depends on you which company you want to be a part of.
Hope this article was useful for you. Either product or service-based company, it totally depends on you which company you want to be a part of.
You can follow The Corporate Demands on various social media platforms and know more about the corporate stuff.
Check Naukri.com Vs Monster.com, which has the upper hand.
