We are independent & ad-supported. We may earn a commission for purchases made through our links.

Advertiser Disclosure

Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.

How We Make Money

We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently from our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What is a Value Added Chain?

Malcolm Tatum
Updated May 16, 2024
Our promise to you
SmartCapitalMind is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At SmartCapitalMind, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

A value added chain is a means of describing the way that commercial businesses tend to generate additional benefits or values during the course of their usual operation. In some cases, the chain of events functions as a supply chain that provides raw materials for some businesses that are then used in the manufacturing of various goods and services purchased by commercial or individual consumers. The general idea of the value added chain is that there is always some additional benefit in terms of generating revenue, since the buyer uses the acquired goods to create something that is ultimately sold at a profit and earns income for the company.

One of the easiest ways to understand a value chain is to consider what happens when a textile manufacturer purchases petroleum byproducts that were once considered useless. Today, those waste products can be used to produce artificial fiber that textile plants can use in the creation of a number of different products, including upholstery and carpeting. The manufacturer buys the waste at a very low cost, then refines it into fiber. From there, the raw fiber is sold to other textile manufactures that refine the raw fiber into what is known in the industry as roping yarn. In doing so, the manufacturer earns a considerable amount of profit from refining the waste and turning it into a useful product.

The value added chain continues as the buyer of the roping yarn further refines the product via carding and spinning operations to create yarn that is suitable for weaving into cloth, upholstery, or carpeting. The refined yarn is sold at a profit to manufacturers that actually make the products that are sold on the open market. In turn, the carpet or upholstery manufacturer sells the finished products at a profit to retailers or even directly to consumers. At each step in the process, the materials purchased were used to create something that is later sold at a profit, adding value in the form of profit for each entity involved in the chain.

Value chains differ in specifics, based on the type of raw materials involved and the different ways those materials can be used efficiently by others. The one constant with a value added chain is that every stage or phase in the chain generates additional benefits or values for those concerned. As a business process, understanding the value added chain makes it possible to identify how much profit can be generated while still remaining competitive in the marketplace. For this reason, many businesses make it a point to secure materials that are considered high quality as well as low in price, maximizing the potential to turn those materials into some other type of high quality goods and sell them at the highest price that the market will bear, effectively increasing the value earned from the process.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Malcolm Tatum
By Malcolm Tatum , Writer
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing to become a full-time freelance writer. He has contributed articles to a variety of print and online publications, including SmartCapitalMind, and his work has also been featured in poetry collections, devotional anthologies, and newspapers. When not writing, Malcolm enjoys collecting vinyl records, following minor league baseball, and cycling.

Discussion Comments

Malcolm Tatum

Malcolm Tatum


Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing...
Learn more
SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.