Finished goods are products that have completed all aspects of the production process, and which are being held for sale. Products still in the production process are classified as work-in-process inventory. Several characteristics of finished goods are as follows:
A company with a fast delivery strategy may need to keep a large amount of finished goods inventory in stock.
Goods that have been acquired for immediate resale without any value-added activities are considered to be merchandise, rather than finished goods. Thus, retailers have merchandise in stock, rather than finished goods.