Teak traders face indictment for exploiting small-scale teak forest owners and acquiring excessive market shares from the sale of teak stands by taking advantage of smallholders' limited access to markets and market information. To identify the importance of traders in the smallholder teak marketing, we studied the practices of traders along the market chain, including their roles and costs directly related to teak transfer and transformation, and the strategy applied in competing for value creation. The study revealed that traders play an important role. They consistently search the marketplace to link the supply and demand, perform various sorting functions, and serve to minimise and facilitate the number of contacts in the distribution system. Applying cost leadership approach, a way to establish a low cost operation, is among the suggestions for the traders to gain sustainable competitive advantage.