Thermoelectricity has been proven as a potential technology for the conversion of waste heat into usable electricity. It involves primarily three parameters, namely the Seebeck coefficient, electrical conductivity, and thermal conductivity. However, there are many other interrelated parameters, such as carrier concentration, mobility, effective mass, multi-valley bands, relaxation time, reduced Fermi energy, phonon modes, scattering parameters, and the number of neighbouring atoms in a given structure. The understanding of these parameters is equally important in order to optimize a high figure of merit (ZT). This article addresses the basics of electronic and thermal transport with the help of Boltzmann transport equation, fundamental concepts for the design of thermoelectric (TE) materials, and implementation of several strategies such as alloying, the phonon-glass electron-crystal (PGEC) approach, band engineering and nanostructuring to optimize the ZT of materials, and finally ends with a discussion of the future prospects of heat extraction through different heat sources.