Is it easier to make a profit with a product or a service?

Answer 1

If you are speaking about the US, it is easier to make a profit with a service as the US has been steadily growing in the service sector while declining in the manufacturing\product sector for the last 25 years.

There are many services you can provide by yourself or as the head of a company. One example is a cleaning service. This can be done by yourself or with employees. Another service that is always in demand is day care which again may be done by you alone or with employees.

Any service you can provide for the elderly will only increase in demand as the baby boomers continue to age. Many of them wish to stay at home in their declining years, but their children do not have the option to care for them as it requires two people working to raise a family so they just don't have the time. Services you could provide to the elderly would be transportation or even a delivery service for such things as pharmaceutical items, laundry or groceries.

Answer 2

In my opinion, one can make a profit easier with either a product or a service, and is completely reliant on the actual product or service being offered.

One can make an easier profit from a product if the product involved requires less setup costs. An example is a computer, which is not a very capital intensive product, and one can assemble it at home. This explains why costs of computers have dropped significantly worldwide as there are several options available for any purchaser.On the other hand, if one seeks to manufacture textile-based products, you would need to have a manufactuting plant installed. Such an endeavour can be highly capital-intensive, and would be dependant on building good relations with wholesalers and retailers. The key advantage for products is that there is a readily available market for the product.

With regard to a service it would depend on whether the service is reliant on specific or general clientele. For example, a taxi driver is providing a service to the general public, and is not required to advertise his skills and build an awareness. However, if the service being offered is financial advice, it may require one to be a qualified financial planner, and also build a reputation, which can take a reasonable amount of time.

In all these cases, it is evident that one can generate a high profit from both a product or a service, and would depend on what product or service we refer to specifically.

Answer 3

Ok. some accounting for you. All business have cost and all businesses to STAY in business must keep costs DOWN. Now, it depends on what service you have. It also depends on what product you are selling. Gasoline is inelastic and therefore-eveyone needs gasoline. Profit, Profit, Profit. Only thing is-what are you going to do? Find your own oil? Try to find a sector of business that people need. I want to go into doggy day care-but is it needed? If it is not needed I will not get much revenue. Also look at the cost of doing business. If your relevant costs are ABOVE your relevant revenue, don't go into business. You have to make a business plan. Find out what the prices are for what you want to do. research it. What is the cost of adversiting your business? Where do you want to put it? Los Angeles? Dallas? Is it sessional and related to a specifc area of the country? Like a ski resort? (It doesn't snow much in Southern California -unless you are in the mountians) If you provide a service, you will have to pay for the products. (Like a salon is a service, but you have to buy the shampoo and blowdryers and the chairs, etc.) Oh, also...many people that start a business don't get any revenue/profit for 1 and may be 2 years. Make sure you have enough money to last you 1 year. I think my economics instructor told me that 66% of small business go out of business within the first year. Why? No profit. You must do your homework for this.

Answer 4

Service the costs are relatively small to provide a service whereas a product requires a lot of capital to be invested a quick profit is in providing service, however if your product is good and will sell the rewards will be greater so it depends on your time scale.

Answer 5

Guy,

Contrary to everyone else - I believe the answer is neither......here's why......(and I'll be simplistic)

If you provide a service, you generally have to provide this service yourself. This is time consuming, although as a professional service provider you make a great profit. The merits of doing this are also provided in the answers above.

If on the other hand, you create a product such as a book (for example), you could by way of one simplistic example sell an electronic version of the book on amazon or from your website, you could also pay commissions to affiliates to sell them (i.e. 50% of the sale price), or pay distributors to prepare and send out a physical product on your behalf.

To tie all of the above together, profit is a function of and must be viewed in terms of the level of time and money put into achieving it. If you provide a service, you must always provide it. If you create a product, once its developed, you can (if you choose) sit back and allow others to make the money for you....residual income is the key here!!

Answer 6

A service would probably give more return and be easier in the long term than a product. This would depend obviously on what service.

The best of both worlds would be to have aproduct that you sell for which you then offer a service people pay for for example sky sell sky+ boxes, people then pay for an engineer to install it and then a monthly subscription.

Answer 7

I agree with gsschulte - technically it should be a service. However, providing the service can require the purchase of products (hairdressers for eg) and other overheads (premises, staff, etc) And if you can buy a product at a very competitive price, and there's lots of demand for it and no competition - well, you're laughing.

Answer 8

Service wins hands down. Ive worked in Manufacturing all my life, the people in factories shed the sweat, Salespeople/lawyers/head offices get the cash & rewards.
The costs associated with setting up a Factory are staggering - the average human would go eep if they could see the bills that have to be paid every month.

Answer 9

technically a service because you have much less over head. you can walk onsite with a laptop and do a service otherwise you have to have some sort of production facility and material to make something.

Answer 10

Service!!!!