Tangible goods are physical products defined by the ability to be touched. They are distinct from intangible goods, which may have value but are not physical entities. Goods that are tangible play a large part in retail, though the purchasing of intangible goods is now widely available through the Internet. They are also distinct from services, such as a spa treatment, since the result of a service is not a tangible product.
Goods that are tangible include anything that can be physically touched, including things like printed books, CDs and DVDs, lamps, groceries, and baseball bats. One of the easiest ways to determine whether a good is tangible or not is to ask if a person could physically touch it or pick it up. If the answer is yes, the good is tangible.
Digital files, though technically goods, are examples of intangible products. Downloaded video games, applications, music files, or movies cannot physically be touched. Though they can be bought and sold just as easily as tangible items, digital files are not inherently physical. If a person buys music files and burns them onto a CD, however, he or she has created a tangible product, the finished CD, from initially intangible goods.
One of the benefits of tangible products is that they are often easier to return and track than intangible items. Returning a sweater to the store often requires only that the owner has not damaged it and has kept the tags or receipt as proof of purchase. Returning an intangible good, on the other hand, can be much more complicated.
If a person downloads a music file, the opportunity for return fraud is enormous, as there is no way for the merchant to track whether the person has copied or burned the file before attempting to return it. With traditional computers, it is also usually impossible for a merchant to remove a file from a remote computer once it has been initially purchased or downloaded. For this reason, intangible products often provide samples or free trial periods so that the buyer can be sure of what he or she is purchasing.
Tangible goods may have the downside of requiring more initial cost. Creating a DVD, for instance, requires not only the original files or film print, but also the cost of the disc, packaging, shrink-wrapping, and shipping. Some items, such as groceries, may also have an expiration date, making them valuable only for a short time. On the other hand, tangible products that do not expire often have the chance to remain in the market longer, thanks to the ability to resell second-hand goods.