What ARC Raiders materials are used for
Nearly everything in your workshop runs on materials. Crafting weapons, gear and consumables takes them, and so does building and upgrading each station: the Gunsmith, Gear Bench, Medical Lab, Explosives Station, Utility Station and Refiner. The higher a station's level, the more each upgrade and recipe asks for.
Basic, refined and topside materials
Basic materials such as Metal Parts, Plastic Parts and Fabric come from looting, recycling and Scrappy. Refined materials, like Mechanical and Electrical Components, are made from basic ones at the Refiner or found in raids. Topside materials such as ARC Alloy mostly come from ARC enemies and the surface.
Why buy materials instead of farming them
One station upgrade can take dozens of a single material plus a few rare parts, and farming the last few rare parts can take many raids. Buying the exact amounts you're short of finishes the upgrade or the craft, and leaves your raids for the parts of the game you enjoy.