Final consumer

What is the final consumer?

A final consumer, also known as final recipient, is that natural or legal person who acquires, uses or enjoy movable and immovable property, products, services, activities or functions for your final consumption or definitive.

In other words, it is the individual or organization that actually uses or ultimately consumes the goods and services purchased.

In this way, by the fact that what you buy is for your consumption own self, a final consumer differs from other intermediate consumers by being the last point of the distribution channel.

Customer and end consumer

A customer is an individual or organization that performs a purchase transaction. That said, it could be argued that all end consumers are customers, but not all customers are final consumers.

Regarding what has been mentioned, the industrial consumers, that is, to factories that buy goods and services to manufacture other goods. It should be noted that there are goods that are not for the final consumer, as is the case of products to make other goods and services, which are then sold or rented to third parties; for example, the fabric that is used to make dresses or the plastic that is needed to make toys.

In the case of intermediate customers, who are not final consumers, it will be important to be aware of the route of the distribution channels of the goods. For example, a farmer sells the tomatoes he harvested in the field to a wholesaler, who in turn will sell them to a distributor in the city, who in turn will market the tomatoes purchased in grocery stores and supermarkets. Both the wholesaler and the distributor, as well as the supplies and supermarkets, are mere intermediaries between the farmer and the final consumers of the tomato, who will complete their purchase at the time of paying the purchased product at the checkout.

As we saw, the term customer does not mean final consumer, and that is why it is important to understand how and why intermediate customers buy, since in many opportunities the competition between these markets is tough.

Compared to that of final consumers, the industrial market is small with respect to the number of clients that comprise it, which is why competition to place their products is more difficult.

Final consumer examples

Sale of canned beers

Here is an example of a final consumer who sells canned beers:

1. A manufacturer of aluminum cans purchases tin-coated steel or tinplate from its raw material supplier, to incorporate this material into its production process and make the cans.
2. The can company manufactures containers for sale to the soft drink and soft drink industry and to beer companies.
3. The can maker receives an order from the market leading brewer to produce a large batch of cans to pack its beverage.
4. The brewing company packages its beverage in the aluminum cans and orders them in its finished products warehouse for sale.
5. The brewery sells its product to beverage distributors who place significant orders for beers in their canned presentation, so that these distributors then market them among the different liquor stores in the capital city of the country.
6. Licorería A, B, C, SA acquires a significant quantity of cases of canned beer from one of the distributors of the leading brand in the market. This liquor store's main clients are the most important pizzerias and soda fountains in the city, as well as the general public, that is, end consumers.
7. When Licorería A, B, C, SA sells to pizzerias and soda fountains, they do not act as final consumers. The final consumer in this case will be those diners who ask to accompany their food with the leading beer packaged in a can.

Car tire manufacturer

On the other hand, an example of an end consumer of a car tire manufacturer can be the following:

1. A rubber supplier sells a significant amount of raw material to its most important customer, a manufacturer of motor vehicle tires.
2. The tire producer company uses the acquired rubber, the main raw material in its production process, to manufacture automobile tires. Once the production of the tires is completed, and after passing through the respective quality control, it stores the finished products ready for sale in its yards.
3. The tire manufacturer has 2 main customers:
   • The vehicle assembly companies.
   • Exclusive distributors of their products.
4. Authorized dealers sell tires directly to their customers, which is known as the aftermarket. These customers are end consumers.
5. Thus, vehicle assembly companies are customers of the tire factory, but they are not final consumers.
6. A person, whether natural or legal, who acquires some of the vehicles that have the tires of the manufacturer that we have analyzed on, will become the final consumer of the same.