What are Consumer Goods?
Consumer goods are alternately called final goods, and the second term makes more sense in understanding the concept. Essentially, consumer goods are things purchased by average customers, and will be consumed or used right away. This is in contrast to other types of goods called intermediate goods. Intermediate goods are products produced or things sold that will be used in the making of something else by another manufacturer or an assembler. For instance, fabric produced from cotton might be an intermediate good. The clothing made from the fabric would be consumer goods, since it has reached its final destination: the consumer.
The issue of consumer goods is most important in assessment of Gross Domestic Product (GDP), basically a yearly measurement of what is purchased (consumed), made, invested, and what is spent by the government. Economic analysts can parse out the different types of goods that are included in the GDP, and look at how each area is performing. So for instance, a decline in the sale of consumer goods would indicate people aren’t spending as much on most consumer items, which can include on food, automobiles, clothing, electronics, and a host of other things.
Some things that would seem like consumer goods are not traditionally classed as them. For instance, most things sold second hand aren’t consumer goods any longer because they were already counted as final goods earlier. This would include the resale of items like cars, clothing or jewelry. Other things that you might purchase like parts of cars, even tires or a car battery, aren’t final goods either. Technically, the goods used in the assembly of cars don’t represent a final product, even though many of us have had to buy new tires for a car or replace a car’s battery, because they may be used in the production of new items.
There’s also a classification of goods called Fast Moving Consumer Goods (FMCG) or Consumer Packaged goods. These are items that will be sold very quickly. Most items sold in grocery stores are FMCGs, and many small electronics items make the list too. These things don’t always sell quickly but usually are consumed quickly, and are usually defined because they are in contrast to what are called durable goods, like big appliances. Simply put, a jar of strawberry jam, an FMCG, will be consumed much more quickly than the refrigerator you place it in, a durable good.
Another group of final goods is called Fast Moving Consumer Electronics (FMCE). These include items like cameras, cellphones, MP3 players, and laptop computers. Note that desktop computers may be more likely to be considered as durable goods, though they’re still final goods because they tend to live longer than the average laptop.
Written by Tricia Ellis-Christensen
