Customer versus Consumer

01/04/2021 1 By indiafreenotes

A person who buys the goods or services and pays the price thereof. The word customer is derived from the term ‘custom’ which means ‘practice’, so the word customer means the individual or entity who purchases product or services from a seller at regular intervals. It can also be known as client or buyer. They are divided into two categories:

Trade Customers: The customers who purchase goods in order to add value and resell them. These include Manufacturers, Wholesalers, Distributors, Retailers etc.

Final Customer: They are the customers who purchase it either for their own use or to hand over it to the final user.

The three kinds of customers:

  • Former customers or ex-customers
  • Existing customers
  • Prospective customers


a person who is the end user of the product. The word consumer is made from the word ‘consume’ which means ‘to use’. In this way, the word consumer means a person who purchases the product or service for his own use or consumption.

As per the Consumer Protection Act, 1986, it does not include the person who purchases the commodity for the purpose of adding value or resale for any commercial purpose. However, a person can use those goods or services to earn livelihood or self-employment. Any type of user, other than the buyer who purchases goods, consumes the goods by taking permission of the buyer will also come under the category of Consumer. It includes the person who avails the services for any consideration. Moreover, the beneficiary of such services will also be regarded as the consumer. There are three Consumer protection council in India:

  • At national level: Central Protection Council
  • At state level: State Protection Council
  • At district level: District Protection Council
Consumer Customer
Meaning The end user of goods or services is known as a Consumer. The purchaser of goods or services is known as the Customer.
Resell No A customer can be a business entity, who can purchase it for the purpose of resale.
Purchase of goods Not necessary Yes
Purpose Consumption Resale or Consumption
Price of product or service May not be paid by the consumer Paid by the customer
Person Individual, Family or Group of people Individual or Organization