Commodity vs. Product: What’s the Difference?

The main difference between Commodity and Product is that a commodity is a basic item that is the same no matter where you get it, while a product can be different.

Before we move to more differences, let’s first understand Commodity and Product:

  • Commodity: A commodity is something that people buy and sell. It can be things like food, clothes, or toys. Lots of people want it, so it has value.
  • Product: A product is something made to be sold. It can be anything from a toy to a computer. People create products to meet the needs or wants of others.

Now, let’s get to Commodity vs Product:

Major differences between Commodity and Product

Commodity Product
A commodity is a raw material or primary agricultural product that can be bought and sold. A product is a finished item that is manufactured and offered for sale.
A commodity is generally standardized and interchangeable with other similar goods. A product can be unique and differentiated in the market.
Commodity prices are influenced by global supply and demand dynamics. Product prices are influenced by factors like branding, marketing, and consumer perception.
Commodity trading is often done on exchanges. Products are typically sold through various distribution channels.
Commodities are usually considered fungible, meaning they are mutually interchangeable. Products have specific features and qualities that differentiate them from one another.

So, these are the main differences between the entities.

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