Nearshoring Isn’t The Answer You Think It Is.
The Real Unit Economics And The Framework For Getting The Decision Right.
Nearshoring Isn’t The Answer You Think It Is
Since the tariff environment shifted, nearshoring has become the default answer in almost every sourcing conversation. Reshore to Mexico. Move to Central America. Build closer to the customer.
The story is intuitive. The math is more complicated.
What The Math Actually Looks Like
Three numbers move at once. FOB goes up 15 to 30%. Freight comes down, sometimes significantly. Lead time compresses from 90 to 120 days to 30 to 45. The net landed cost usually ends up roughly neutral. The decision gets made in the second-order effects.
Where The Hidden Costs Live
Higher MOQs push total on-order up, which means more cash tied up and more markdown exposure if sell-through softens. Quality ramp on the first two to three cycles often shows up in return rates and chargebacks. Capability gaps vary widely across the nearshore base. And capacity is being pressured by every major brand at the same moment.
When It Actually Works
The cleanest wins are partial. Moving 20 to 40% of production to the nearshore base, targeted at styles where speed matters most. Replenishment basics. Core carryover. Fast-response DTC programs. The long-lead, high-complexity work almost always stays where it is.
Turnaround brands need to be especially careful. Higher MOQs and cash requirements cut against exactly what a recovery needs.
The Right Frame
Nearshoring is a tool. It is not a strategy. The brands that use it well run the math specifically, pilot before they pivot, and treat it as a portfolio decision.
Swipe through for the real unit economics, the hidden costs, and the framework for getting the decision right. 👇
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