There are several types of goods on the market and some last longer than others. Durable goods are items that last over extended periods and don’t require frequent purchase. According to the U.S Department of Commerce, durable goods last for at least three years on average. The demand for durable goods can be a metric used to track economic performance. For this reason, the U.S. Census Bureau produces the Monthly Advance Report on Durable Goods Manufacturers’ Shipments Inventories and Orders to track the demand of durable goods. When consumers are purchasing high volumes of durable goods, it means the economy may be doing well.
What Are Durable Goods?
Consumer goods fall into three buckets: nondurable goods, durable goods, and services. Any item that has longevity and doesn’t need to be purchased frequently falls into the durable goods category. While these goods experience wear and tear, if maintained, they don’t need to be updated regularly.
Some other characteristics of durable goods include reusability and being relatively expensive. They also often require financial planning or sometimes loans to purchase but don’t don’t break down easily. Oftentimes consumers invest in durable goods when the economy is doing well.
Types of Durable Goods
There are various types of durable goods out there, but they typically fall into two main categorie – consumer and business.
Consumer Durable Goods
This category of goods is purchased by everyday consumers. The objective is usually to use these products for as many years as possible. The longevity of these goods can make the high upfront cost worthwhile. Examples may include a new refrigerator, car, washing machine, or furniture set.
Business Durable Goods
Business durable goods serve a similar purpose except they’re usually used to help with business operations. Some businesses require certain equipment or items to function, so buying durable goods is a way to help with production or growth efforts. Businesses may need a range of durable goods. For example, a clothing company may have to buy machines to make the clothes, a PR firm may need laptops and smartphones, and a sales company may need to purchase company cars for sales reps to get around.
Durable Goods Vs. Nondurable Goods
Nondurable goods are the opposite of durable goods-they have an average lifespan of under three years. When it comes to nondurable goods, they aren’t used many times and require consumers to purchase them frequently. Unlike durable goods, they also tend to cost less, meaning consumers may not require financial planning or loans to purchase them.
Everyday examples of nondurable goods can include produce like fruits and vegetables, toilet paper, gasoline, products made from paper and cardboard, as well as disposable food service products like plastic cups and plates. While these are everyday necessities, they don’t last as long as durable items do.
Another important difference to note is that durable goods can often be rented. For example, one can rent a car or even furniture and equipment as opposed to purchasing and owning said items. Nondurable goods oftentimes can’t be rented.
