Intermediate goods are products that are used by businesses as inputs in the production of other products, while final goods are products that are consumed by the end user. Understanding this distinction is key to understanding how business revenue is generated.

Intermediate goods are essential components of the production process and are intended for use in the production of a different product for sale at a later date. Examples include raw materials such as lumber, iron ore, or cloth, as well as more complex components like computer parts or machine tools.

Final goods are those which have been fully processed and are ready for sale and consumption. Examples of final goods would be furniture, jewelry, clothing, cars, and many other consumer items. When a business sells a final good, the revenue generated is typically recorded as the business’s income.

In short: intermediate goods are used to create final goods; final goods generate revenue.