Red Goods

Quick Summary of Red Goods

Food products that are quickly consumed, frequently replaced, and have a low profit margin.

Red goods are consumer goods that are consumed quickly and thus replaced quickly. Consumer goods, also called “final goods,” are items purchased by customers for use or consumption. The classic example of red goods is food products. Red goods also generally have a low-profit margin for manufacturers.

What are other categories of goods?

There are two categories of goods similar to red goods, which vary primarily on how quickly the good must be replaced:

• Orange goods: consumer goods that will be replaced at a moderate rate. Clothing is the classic example of an orange good because, though most clothes are fairly durable, clothing will be replaced at a moderate rate due to factors such as damage or changes in preferred style.
• Yellow goods: consumer goods that are non-consumable and will be replaced at a slow rate. Yellow goods include household appliances such as refrigerators and dishwashers. Yellow goods generally have a high-profit margin for manufacturers.

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