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Raw Materials

What are raw materials?

Raw materials are the basic materials used in the production or manufacturing of finished goods. As an inventory asset, raw materials are in-demand commodities that are bought and sold in real-time on the factor market. A company’s raw materials inventory can be used to create an array of products, yet the type of materials required will depend on the needs of their manufacturing processes, as well as their efforts toward sustainability.

Frequently Asked Questions

  • What are examples of raw materials?

    Raw materials are the unprocessed resources or materials in the supply chain that transform into a finished goods inventory. Examples of raw materials include things like: stainless steel, silica, oil, lumber, plastic, natural gas, biomass, and more. A great illustration of raw materials in the real world comes from natural latex; derived from trees, natural latex is used to make finished products like gloves, balloons, rubber bands, sneakers, and even mattresses.

  • What are the types of raw materials?

    While it’s true all raw materials are obtained naturally, they can also be classified as one of three types (according to where they’re derived from). Plant or tree-based materials include fruits, vegetables, flowers, wood, resin, or anything else sourced from plants. Animal-based materials are things like leather, meat, bones, milk, wool, and silk, all of which are obtained from animals. And finally, the mining-based category covers those materials gathered from mining the earth, like minerals, metals, crude oil, coal, and so on.

  • What are other words for raw materials?

    In some instances, companies may refer to their raw materials as natural resources, unprocessed materials, or primary commodities. Regardless of which phrase a brand prefers, raw materials (and their subsequent production process) remain the fundamental building blocks for energy, intermediate materials, and the final products we use on a daily basis. 

More terms and formulas

Other Amazon Marketing Services (AMS) See definition and examples
inventory Perpetual Inventory System See definition and examples
Other Made To Stock See definition and examples

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