Types of Products: A Guide To Classifications (2025)

Discover the different types of products in commerce and learn how product classification impacts pricing strategies and buying behavior.

Organizing your online store by product type helps customers find what they need faster, makes your promotions more compelling, and drives sales. But getting product classification right isn’t as simple as it looks—the Baymard Institute found that 75% of ecommerce sites misclassify or over-categorize their products, pushing shoppers to abandon their search before checkout.

This guide covers the main product categories in commerce, how they affect buyer behavior, and how to use this knowledge to boost your sales.

What are products?

Products are anything a company sells—whether physical items, digital products, or services. In retail, you’ll often hear products called consumer goods or merchandise. Retailers choose their merchandise based on market demand and what their customers want, from everyday essentials to luxury items.

Manufacturers use the term “product” for both the raw materials they buy for production and the finished goods they sell. These two sides of commerce take different approaches to product development and marketing to succeed.

How are products classified?

Product classification is how you categorize products based on specific characteristics. You might classify products to better understand how customers shop or to decide which white-label or private-label products to source.

Common ways to classify products include:

• Use case or function,like kitchen appliances or sports equipment
• Industry or market, such as automotive or fashion
• Demographics, like products for seniors, men, or women
• Price range, budget, mid-range, and luxury
• Material, such as organic or wood
• Style, like modern, vintage, or bohemian

Product categories can overlap or combine to meet customer needs. Many businesses create their own classification systems for different product lines to match their specific goals. Within each system, every SKU belongs to a clear product class that guides marketing and merchandising decisions.

Product taxonomy is the hierarchical system you use to organize and categorize products on your ecommerce platform.

Product classification impact on business strategy

Understanding how customers view and buy your products directly shapes your business strategy. Whether people buy your product on impulse, research it carefully, or seek it out specifically affects how you market, where you sell, how you price, and how you support customers.

• Marketing strategies: Products people buy on impulse need broad visibility and easy access—think eye-catching displays and simple checkout processes. Products customers research carefully require detailed information, reviews, and targeted campaigns that build trust and demonstrate value.
• Pricing: Everyday necessities typically compete on price and convenience, while niche or luxury items can command higher margins when you position them around quality, uniqueness, or status.
• Sales channels: Common household items often perform best in marketplaces or retail chains where customers expect to find them. Premium or customizable products may work better through direct-to-consumer channels where you can control the buying experience and build relationships.

Types of consumer products

Consumer products are goods that people buy for personal or household use. They are the trending products you find online or in stores, marketed directly to individuals.

Clothing is a type of consumer product. Shopify Burst

Convenience goods

Convenience goods, sometimes referred to as consumer nondurables, are products that people buy frequently with little thought or effort. People buy these regularly because they get used up or consumed—you run out of milk, finish your toothpaste, or read your magazine. 

These items are typically low-cost and widely available, making them easy to grab on the go. Most convenience goods are purchased when you need them (like grabbing batteries when yours die) rather than as planned purchases.

Many businesses rely on convenience products for steady sales and profits. However, since they’re so widely available, it’s hard to make your convenience goods stand out from competitors.

Examples of convenience goods:

• Milk
• Toothpaste
• Soap
• Laundry detergent
• Magazines
• Snack foods
• Water

Shopping goods

Shopping products, sometimes called consumer durables, are items people buy less frequently. They’re often more durable and expensive than convenience goods and target specific audiences.

People research and compare shopping goods because they cost more, have varying features between brands, and are used them for months or years. For example, when buying a new car, shoppers compare different models to find the best combination of price, fuel efficiency, safety features, personal preferences, and more.

Since shoppers compare products across multiple factors, your product features need to stand out. The best way to do this is through effective marketing and branding that highlights your product’s most attractive features.

Examples of shopping goods:

• Clothing
• Cars
• Appliances
• Furniture
• Phones
• Eco-friendly products
• Office furniture

Specialty goods

Consumers view specialty goods as unique and different from other products. Because they offer something no other product can, they’re worth a premium price. Customers actively seek out specific specialty brands and won’t accept substitutes—they want that exact designer bag or luxury car model.

Businesses need a strong brand identity, clear product positioning, and consistent messaging to convince consumers that your specialty products are worth the premium price and to build the exclusivity and brand loyalty these products require.

Examples of specialty goods:

• Designer handbags and clothes
• Luxury cars
• Gourmet foods and beverages
• High-end cosmetics
• Custom jewelry

Unsought goods

Unsought products fall into two categories: things customers don’t know exist (like specialized software) and things they know about but avoid thinking about (like life insurance or funeral plans). 

They’re often expensive, risky, or complicated products, typically solving problems customers haven’t considered or addressing needs they never hope to have. Since unsought goods aren’t top-of-mind for customers, you need to work harder to generate interest and awareness. You can do this through creative marketing, personal selling, and other forms of advertising.

Examples of unsought goods:

• Fire extinguishers
• Medical kits 
• Home security systems
• Life insurance 
• Funeral services

Sustainable and eco-friendly products

Eco-friendly products minimize environmental impact throughout their life cycle—from sourcing and production to packaging and disposal. These goods prioritize ethical labor, resource efficiency, and reduced waste.

Sustainability has become such a strong purchase driver that it can override traditional product categories—customers might choose an eco-friendly option even if it costs more or requires more research. As more customers factor sustainability into their buying decisions, businesses that offer eco-friendly alternatives can tap into growing demand and build long-term brand loyalty.

Depending on the product type, sustainable products can fall into any category:

• Sustainable convenience products: Compostable trash bags, bamboo toothbrushes
• Sustainable shopping products: Organic clothing, energy-efficient appliances
• Sustainable specialty products: Electric vehicles, handcrafted zero-waste skin care
• Sustainable unsought products: Home solar panels, water-saving plumbing systems

Examples of sustainable products:

• Reusable water bottles
• Organic cotton t-shirts
• Biodegradable cleaning supplies
• Solar-powered chargers
• Refillable beauty products

Cross-category goods

Cross-category products emerged as technology converged different functions (like smartphones combining cameras, music players, and computers) and lifestyles changed to blur traditional product boundaries. This means you need flexible marketing strategies that can appeal to different customer motivations and use cases.

The versatility of cross-category goods offers new opportunities but also creates challenges for messaging, targeting, and choosing sales channels. You need to carefully analyze customer behavior and context to position cross-category goods effectively.

Examples of cross-category goods:

• Smartwatches (convenience + specialty)
• Meal kit subscriptions (shopping + unsought)
• Designer athleisure (shopping + specialty)
• Air purifiers (convenience + unsought)
• Eco-friendly cleaning robots (sustainable + shopping + specialty)

Digital products and services

Digital products are intangible goods delivered electronically. There’s no physical inventory, packaging, or shipping involved. Unlike physical products, digital goods can be reproduced infinitely without additional manufacturing costs, creating different business economics. These include everything from software and streaming subscriptions to ebooks and online courses.

Digital products can behave like any traditional product category depending on how customers use them. A productivity app might be a convenience good for daily users but a specialty product for professionals seeking specific features. But that versatility means digital products face unique challenges: it’s harder to demonstrate value without a physical item to touch, many use subscription models instead of one-time purchases, and businesses must protect against piracy and unauthorized sharing.

When selling digital goods, focus on building trust, offering smooth user experiences, and clearly communicating value—especially when there’s no physical item to display.

Examples of digital products:

• Music and video streaming subscriptions
• Mobile apps and games
• Ebooks and audiobooks
• Online courses and certifications
• Website themes and design templates
• Cloud storage and software-as-a-service (SaaS) tools

Types of industrial products

Industrial goods are used to create other products. Companies use them in manufacturing or to maintain and repair machinery and equipment. Industrial products are sold business-to-business, which means longer sales cycles, multiple decision-makers, and different pricing strategies than consumer products.

A warehouse uses industrial products to keep operations running smoothly. Shopify Burst

Raw materials

Raw materials are goods that haven’t been processed yet and are used to make other products. These fall into two main categories: farm products (like wheat and cattle) and natural products (like oil and minerals). They support diverse industries like agriculture and textiles and contribute to global economic growth.

Because raw material costs can fluctuate based on supply and demand, manufacturers need different procurement strategies and often hedge against price swings that could affect their production costs.

Examples of raw materials:

• Wheat
• Cattle
• Water
• Natural gas
• Minerals
• Wool

Processed materials

A processed material is something that has been refined so it can be used in another product’s manufacturing process. Since these materials have been through a manufacturing process, they tend to have a longer shelf life and offer more consistent quality than raw materials.

Companies often choose processed materials for their consistency and convenience, even though they cost more than raw materials.

Examples of processed materials:

• Steel
• Plastics
• Refined sugar
• Glass
• Paper
• Plywood

Capital goods

Capital goods are anything needed for the production process, such as machines, major equipment, or tools. These represent major investments that companies depreciate over time and that determine their long-term production capacity. Raw materials and processed materials are needed to make capital goods. A computer, for instance, requires metals, glass, and plastic.

Capital goods involve complex purchasing decisions with multiple stakeholders and long evaluation periods, due to their high cost and long-term impact.

Examples of capital goods:

• Machinery
• Buildings
• Vehicles
• Robots
• Software
• Computer

Intermediate goods

Intermediate goods are products that get consumed or transformed during the manufacturing process of final products—they lose their original identity in the process. 

Intermediate goods can include parts and components used to produce a final product, but unlike component parts that retain their identity, intermediate goods get changed or used up in production.

For example, commercially mined rock salt is an intermediate good because it’s used to produce many food and nonfood consumer goods, but isn’t itself a final product.

Examples of intermediate goods:

• Semiconductors
• Flour
• Lumber
• Cotton
• Automotive parts

Component parts

A component part makes up a bigger system or product and retains its identity in the final assembly. For example, to make a car, the component parts include the engine, transmission, and brakes. 

Unlike intermediate goods that get transformed during production, component parts keep their original form and function in the finished product.

Examples of component parts:

• Circuit boards
• Tires
• Display screen
• Batteries

Accessory equipment

Accessory equipment doesn’t contribute to the core operation of a process or system but improves its efficiency, safety, or quality. These are typically smaller, less expensive items that support capital goods but aren’t essential for basic operation.

Examples of accessory equipment:

• Printers and scanners
• Dollies
• Cash registers
• Display racks
• Conveyor belts

Operating supplies and services

A business’s operating supplies are consumable items it needs to run day to day. Like convenience goods for consumers, they need regular replenishment. They’re often used in production or maintenance but don’t directly impact the products sold.

Companies often bundle services with supplies for convenience, like combining cleaning supplies with janitorial services.

Examples of operating supplies and services:

• Stationery
• Cleaning services
• Safety equipment
• Shopping bags
• Waste disposal services

Digital industrial products

Digital industrial products include software tools and platforms built for industries like manufacturing, logistics, and infrastructure. They help businesses work more efficiently, cut costs, and make smarter decisions using data.

As more companies adopt digital technology, solutions like AI-powered analytics, digital twins, and industrial Internet of Things (IoT) systems are becoming essential. These solutions tend to be complex and high-investment, more like specialty or unsought products. That means businesses need to educate buyers, show clear return on investment (ROI), and provide strong support during longer sales cycles.

Many digital industrial products use subscription models and require significant integration with existing systems, creating ongoing support needs.

Examples of digital industrial products:

• AI-powered predictive maintenance software
• Industrial Internet of Things (IIoT) platforms
• Digital twin simulation tools
• Supply chain management software
• Smart factory automation systems
• Cloud-based ERP solutions

Product classification trends

As consumer behavior evolves and technology reshapes how we shop, the way products are defined and marketed is changing too. Each shift creates new product opportunities for brands that adapt quickly. 

Traditional classifications still matter, but they’re no longer the whole story. Today, businesses respond to new expectations around personalization, sustainability, and digital experiences. Here are three emerging trends shaping the future of product categories:

AI-enhanced product categories

AI in ecommerce is reshaping how customers shop and how products are positioned. Through machine learning, businesses analyze customer data to deliver highly personalized recommendations, letting brands tailor products to individual preferences beyond broad categories.

With the right AI tools, even a basic item can feel like a specialty product when shown to the right shopper. AI also improves product discovery, making it easier for customers to find what they need based on behavior and preferences.

Digital-physical hybrid products

More brands blend digital features into physical products to create engaging new experiences. These innovative products offer added value through personalization, interactivity, or convenience.

Qliktag’s tokenized artwork pairs physical art with digital authentication and bonus content, creating a more immersive ownership experience.

Nike and Sephora use augmented reality (AR) to let customers virtually try on shoes or makeup, bringing the in-store experience online.

Sephora makes it easy for shoppers to try on makeup products from the comfort of their own home.

Circular economy and product lifecycle

Sustainability reshapes how brands design, make, and sell products. The circular economy encourages businesses to think beyond single-use items and design products for reuse, recycling, and longevity. Planning for the entire product development life cycle from the start makes this approach much more effective.

This shift changes how we categorize products, putting more emphasis on durability and environmental impact. Many companies now use product life cycle management tools to monitor and improve every stage of a product’s life, from design to disposal.

Brands that embrace circular economy principles can reduce waste, meet growing demand for eco-friendly options, and differentiate themselves in crowded markets.

How to use product classification to increase sales

Understanding your product type sharpens your strategy and drives more revenue. Here’s how to maximize your product strategy:

• Tailor your marketing: Promote convenience products with high visibility and easy purchasing and use storytelling and targeted messaging for specialty goods
• Refine your pricing strategy: Match your pricing to customer expectations, compete on value for shopping products, and position specialty items as premium
• Choose the right sales channels: Sell impulse buys through marketplaces or retail and use your own website for niche or high-consideration items
• Plan your inventory wisely: Stock high-turnover items in greater volume and focus on demand forecasting for unsought or seasonal goods
• Personalize the customer experience: Use AI and segmentation to align product recommendations with buyer intent and behavior

Create better products for your customers

To grow your business, you need to offer the right types of products and market them effectively. Now that you understand the main product categories and buying behaviors, you can adjust your pricing, messaging, and sales channels to match.

The next step is to identify where your products fit, adapt your strategy accordingly, and look for opportunities to innovate. A structured new product development process keeps those innovations aligned with market demand.

With Shopify, you can easily sell, manage, and market any type of product from one platform built to help you scale.

Types of products FAQ

Why is product classification important?

Product classification affects many aspects of your business strategy, including positioning, pricing, target customers, and marketing approach.

What are tangible and intangible products?

Tangible products are physical items you can see and touch, like clothing, furniture, and phones. Intangible products are services or benefits that you can’t physically experience, like software subscriptions or insurance policies.

How does product type affect pricing strategy?

Product type significantly affects your pricing approach. Tangible goods require you to cover manufacturing, distribution, and warehousing costs, plus profit margins. Intangible products like consulting services use value-based pricing—you set prices based on the estimated value to the customer.

What’s the difference between consumer and industrial products?

Consumer products are goods and services bought for personal use, like food and clothing. They target individual customers with broad market appeal. Industrial products are purchased to operate a business and include raw materials, machinery, or professional services.

What are the main types of products?

• Convenience products: Everyday items bought frequently with little effort (like snacks or soap)
• Shopping products: Items customers compare before buying (like clothes or electronics)
• Specialty products: Unique or high-end items with strong brand loyalty (like luxury watches)
• Unsought products: Things people don’t usually think to buy until needed (like insurance or fire extinguishers)
• Digital products: Intangible goods delivered online (like ebooks or software)

What are some emerging product categories?

• Digital products and services: Online courses, subscriptions, and software
• Sustainable and eco-friendly goods: Items made with minimal environmental impact
• Digital-physical hybrids: Physical items with digital features, like smartwatches or AR tools
• AI-powered tools: Products that use artificial intelligence to personalize or automate experiences
• Circular products: Designed for reuse, recycling, or resale to support a circular economy

How does classification impact pricing strategies?

• Convenience products usually compete on price and availability
• Shopping products require competitive pricing based on features and quality
• Specialty products can command premium pricing due to brand loyalty
• Unsought products need value-focused pricing and education to justify the cost