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Manufacturers convert raw materials and natural resources into useful goods for many different consumers. In order to do this process in an efficient manner, manufacturers typically rely on a raw materials supplier. This supplier gathers natural resources or other raw materials and ships them to manufacturers and other producers. The individual activities of this supplier basically include the collection and dissemination of resources to paying customers. This process is an integral part of the free market economy and a major portion of the invisible hand as defined by economists.
A raw materials supplier must usually have access to natural resources in order to collect and disseminate raw materials. For example, a lumber mill needs trees, which can grow in a number of places depending on the variety of tree needed by the supplier. Access to trees can require land purchases or leases from governments or other businesses. The same goes for other natural materials, such as stone, minerals, fish, or livestock. The creation of agreements that create exclusive use can help a supplier to engage in better business contracts when compared to competitors.
Some refinement of natural resources or other raw materials may be necessary. Raw materials suppliers must have these refinement abilities if they are going to sell their goods directly to manufacturers. Other times, the supplier may send the materials to a middleman operation, which does the refining and then sells the goods directly to manufacturers. This process may not be very common as suppliers usually have refinement capabilities in order meet the demands of manufacturers. In some cases, suppliers may even be able to engage in refinement activities at the collection point of natural resources.
All companies must have sales departments in order to move their goods from the point of collection or production to end users. A raw materials supplier is no different. This organization often has individuals who handle sales and customer service in order to induce or increase sales. In most cases, the supplier does not care how many customers it has or who it sells materials to. The more customers who purchase the materials will increase the supplier’s coffers and allow for refinement of the material collection process.
The services and products offered by a raw materials supplier may need to change over time. The free market is rarely stable, creating this constructive capitalism. Suppliers of raw materials need to adjust their offerings in order to ensure sustainability. Listening the needs of manufacturers can help the supplier achieve this goal.